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The Ohio Freight Company's common stock is selling for $40 the day before the stock goes ex- dividend. The annual dividend yield is 6.7 percent,
The Ohio Freight Company's common stock is selling for $40 the day before the stock goes ex- dividend. The annual dividend yield is 6.7 percent, and dividends are distributed quarterly. Based solely on the impact of the cash dividend, illustrate the effect on the stock price (by how much should the stock go down on the ex-dividend date)? What will the new price of the stock be? 7 A B IEEE
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