Assume that it is 2008. You purchased CSH stock for $42 one year ago and it is now selling for $54. The company has announced that it plans a $12 special dividend. You are considering whether to sell the stock now, or wait to receive the dividend and then sell.

a. Assuming 2008 tax rates, what ex-dividend price of CSH will make you indifferent between selling now and waiting? In 2008, the capital gains tax rate is 15 % and the dividend tax rate is 15 %. The tax on a $12 capital gain is $ _____, and the tax on a $12 special dividend is $_______. The after-tax income for both will be $ ________ ( Round to the nearest cent)

b. Suppose the capital gains tax rate is 20 % and the dividend tax rate is 40 %, what ex-dividend price would make you indifferent now?