Question
I recently purchased a stock for $40 per share. The stock is now selling for $54 per share and the firm recently announced a special
I recently purchased a stock for $40 per share. The stock is now selling for $54 per share and the firm recently announced a special dividend of $6 per share. My capital gains tax rate is 20% and my ordinary (dividend) tax rate is 28%. How much would I expect the stock price to decrease (increase) at the ex-dividend date? How much would I expect the stock price to decrease (increase) at the record date? How much tax would I owe if I sold the stock immediately before the ex-dividend date? How much tax would I owe if I sold the stock shortly after the ex-dividend date?
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