Question
Air Taxi, Inc. has declared a $6.50 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 16% and new regulations require
Air Taxi, Inc. has declared a $6.50 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 16% and new regulations require that dividends are taxed when paid. Air Taxi stock sells for $116 per share.
What will the ex-dividend price be?
Dividend per share$6.50
Tax rate 16%
Price $116.00
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
Introduces Quantitative Finance
Authors: Paul Wilmott
2nd edition
470319585, 470319581, 978-0470319581
