Bookmark Following trading hours on April 25, 2017, Costco Wholesale Corporation (symbol: COST) announced that it would pay a special dividend of $7.00 per share in early May. The ex-dividend date for this special dividend was May 8, 2017. Thus, if you held COST stock at the beginning of May 8, 2017, you would have been paid the special dividend of $7 per share. Otherwise, you would have not received the special dividend. The purpose of this question is to examine the COST price reaction on the announcement date and ex-dividend date.

d) What is the change in stock price from the close of the business day preceding the ex-dividend date to the close of the ex-dividend date? Calculate the implied effective dividend tax rate using this price change and the special dividend per share.