Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ABC has just announced that is is planning to pay a dividend of $6.5 per share. Before the announcement the share price of ABC was
ABC has just announced that is is planning to pay a dividend of $6.5 per share. Before the announcement the share price of ABC was $41.5. Assume that the tax rate on capital gains is 8%, the tax rate on dividends is 21%. By how much will you expect the share price of ABC to change on the ex-date. Round your answers to two decimals (do not include the $-symbol in your answer). If you expect a positive change (share price will increase) enter a positive number. If you expect a negative change (share price will decline) enter a negative number
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started