Question 1191944
Here's how to solve for the current stock price:

**1. Understand the Formula:**

The forward price (F) of a stock with dividends is calculated as:

F = (S - PV of dividends) * e^(rT)

Where:

* F = Forward price
* S = Current stock price (what we want to find)
* PV of dividends = Present value of all dividends paid during the life of the forward contract
* r = Continuously compounded interest rate
* T = Time to maturity of the forward contract (in years)

**2. Calculate the Present Value of Dividends:**

* **Dividend 1 (in 6 months):** PV1 = $1 * e^(-0.06 * 0.5) = $1 * e^(-0.03) ≈ $0.9704
* **Dividend 2 (in 1 year):** PV2 = $1 * e^(-0.06 * 1) = $1 * e^(-0.06) ≈ $0.9418

Total PV of dividends = PV1 + PV2 ≈ $0.9704 + $0.9418 ≈ $1.9122

**3. Plug Values into the Formula and Solve for S:**

We know:

* F = $70
* r = 0.06
* T = 3 years
* PV of dividends ≈ $1.9122

Now, plug these values into the formula:

$70 = (S - $1.9122) * e^(0.06 * 3)
$70 = (S - $1.9122) * e^(0.18)
$70 = (S - $1.9122) * 1.1972
$70 / 1.1972 = S - $1.9122
$58.47 = S - $1.9122
S = $58.47 + $1.9122
S ≈ $60.38

**Therefore, the current stock price is approximately $60.38.**