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Tennessee Bread Ltd . is going out of business at the end of the year. After liquidating its assets and paying its liabilities, it will
Tennessee Bread Ltd is going out of business at the end of the year. After liquidating its assets and paying its liabilities, it will have enough cash to pay a liquidating dividend of $ Assume that there is only one share outstanding and you are the shareholder. The dividend is paid on Dec Assume that today is January The shareholder you requires a return of and pays a tax rate of on dividend income. Assume that the dividend tax is only paid on the difference between the liquidating dividend and the purchase price for the share. Assume that you buy it today. What is the price of the Tennessee Bread today?
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