16. Dividends and Taxes. Good Values, Inc., is all-equity-financed. The total market value of the firm currently is $100,000, and there are 2,000 shares outstanding. Ignore taxes. (LO1)

a. The firm has declared a $5 per share dividend. The stock will go ex-dividend tomorrow. At what price will the stock sell today? Tomorrow?

b. Now assume that the tax rate on dividend income is 30%, and the tax rate on capital gains is zero. At what price will the stock sell, taking account of the taxation of dividends?