Suppose that the tax rate on dividends is 28%, and the tax rate on capital gains is

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Suppose that the tax rate on dividends is 28%, and the tax rate on capital gains is zero. Eagle Net Resources is about to pay a $2 per share dividend.
a. By how much will Eagle Net's share price fall when the stock goes ex-dividend?
b. Will anything happen to the share price on the payment date when the dividend cheques are sent our?
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Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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