Question
Air Taxi, Inc. has declared a $9.00 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 19% and new regulations require
Air Taxi, Inc. has declared a $9.00 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 19% and new regulations require that dividends are taxed when paid. Air Taxi stock sells for $119 per share.
What will the ex-dividend price be?
Dividend per share$9.00
Tax rate19%
Price$119.00
111.71
110.81
126.29
107.89
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Fundamentals of Corporate Finance
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
8th Edition
978-0073530628, 978-0077861629
