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Good Values, Inc., is all equity-financed. The total market value of the firm currently is $100,000 and there are 2,000 shares outstanding. a. The firm
Good Values, Inc., is all equity-financed. The total market value of the firm currently is $100,000 and there are 2,000 shares outstanding. a. The firm has declared a $5 per share dividend. The stock will go ex-dividend tomorrow. At what price will the stock sell today? Ignore taxes. (Round your answer to the nearest cent.) Stock price $ 50 b. Now assume that the federal marginal tax rate is 26% and the provincial marginal tax rate is 13.39%, the federal dividend tax credit is 13.33% of the grossed-up dividend, and the provincial dividend tax credit is 5.1% of grossed-up dividend. The applicable gross-up for dividend tax credits is 25%. What is the dividend tax rate? (Round your answer to 1 decimal place.) Dividend tax rate c. Using your result for the dividend tax rate from part (b) and assuming a capital gains tax rate of zero, at what price will the stock sell today? (Round your answer to the nearest cent.) Stock price $
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