Question
After the market close on May 11, 2001, Adaptec, Inc., distributed a dividend of shares of the stock of its software division, Roxio, Inc. Each
After the market close on May 11, 2001, Adaptec, Inc., distributed a dividend of shares of the stock of its software division, Roxio, Inc. Each Adaptec shareholder received 0.1646 share of Roxio stock per share of Adaptec stock owned. At the time, Adaptec stock was trading at a price of $10.55 per share (cum-dividend), and Roxio's share price was $14.23 per share. b. Now, consider the capital gains tax rate is 15% and the dividend tax rate is 20%. What would Adaptec's ex-dividend share price be after this transaction ($)? Ignore taxes from selling Roxio shares.
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