You purchased 1 share of CSH stock for $34 one year ago and it is now selling for $46. The company has announced that it plans a $12 special dividend per share. You are considering whether to sell the stock now or wait to receive the dividend and then sell. Assume that all investors are subject to the capital gains tax rate of 15%, and the dividend tax rate iof15%.

(i) What is the effective dividend tax rate?

(ii) What ex-dividend price of CSH will make you indifferent between selling now and waiting?

(iii) Suppose that you predict strongly that the ex-dividend price is $38, should you sell the stock today or wait till stock goes ex-dividend then sell the stock?