Hello Arin86, You did a great job on my last question and I was hoping you could help me with two other questions. Thanks Kmdavis49

RRM Incorporated has just declared a dividend of $10.25 per share. The tax rate of dividends is 20 percent. The tax rate on capital gains is zero. The tax laws require the taxes to be withheld when the dividend is paid. RRM currently sells for $107 per share and the stock is about to go exdividend. What do you calculate the exdividend price will be? A. 98.80 B. 96.75 C. 93.80 The firm you are CEO if has a current period cash flow of 1.0 million and pays no dividend. The present value of the company's future cash flows is $2.5 million. The company is entirely financed with equity and there are 500,000 shares outstanding. Assume the dividend tax rate is zero. What is the share price of your firm? Suppose you and the board announce a plan to pay out 60 percent of the current cash flows as a dividend to its shareholders. How can a shareholder, who owns 1000 shares, achieve a zero payout policy on their own? A. Share price = $10.00, purchase 206.90 shares B. Share price = $7.14, purchase 315.79 shares C. Share price = $10.00, purchase 171.43 shares