A company share has a spot price of 200p today and an "over the counter" Forward Contract is to be arranged for the purchase of the company share in 1 year’s time

Calculation of forward price would be as follows.

the underlying asset pays dividends over the life of the contract, the formula for the forward price is:

F=(S−D)×(e^(r×t))

where,

F=the contract’s forward price

S=the underlying asset’s current spot price=200p

e=2.7183

r=the risk-free rate that applies to the life of theforward contract=5%

t=the delivery date in years =1 year

D equals the sum of each dividend's present value

Here, assume dividend is paid each year end, therefore PV of next year's dividend=3p/(e^(r*t))

=3p/(e^0.05) [As rate of interest is 5%,t=1 year]

=2.853p

Therefore, forward price of share = (200p-2.853p)*(e^(0.05*1))

=197.15*1.0513

=207.26 (approximately)