If the stock price is the same on the cum-day and the ex-day, then the marginal income
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If the stock price is the same on the cum-day and the ex-day, then the marginal income tax rate is τ = 100%, because every investor who would purchase the stock on the cum-day afternoon and sell it on the ex-day morning would get to keep “for free” whatever part of the dividend is not taxed. (I am ignoring the small daily upward drift of stock prices.)
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