Bikers Financial Firm (BFF) currently pays a semi-annual dividend of $0.5 per share. This quarters dividend will be paid to stockholders of record on Friday February 21st, 20X8. BFF has 200,000 common shares outstanding. The retained earnings account has a balance of $15 million before the dividend, and BFF holds $2.5 million in cash.

a) What is the ex-dividend date for this half year?

b) BFF traded for $22 per share the day prior to the ex-dividend date. What would you expect the stock price to open at on the ex-dividend date? Give some reasons why this might not occur.

c) What is the effect of the dividend payment on BFFs cash, retained earnings, and total assets.