15.2. You are considering buying IBM stock which is trading today at $98 a share. IBM is...

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15.2. You are considering buying IBM stock which is trading today at $98 a share. IBM is going exdividend tomorrow, paying out $2.00 per share. If you believe the stock will drop to $96.50 following the dividend, should you buy the stock before or after the dividend payment? Explain how your answer depends on the tax rate on ordinary income, capital gains, and your expected holding period.

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Financial Markets And Corporate Strategy

ISBN: 9780071157612

2nd Edition

Authors: Mark Grinblatt, Sheridan Titman

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