You believe that the average investor is subject to a 20 percent tax rate on dividend payments If a firm is going to pay a $0 30 dividend, by what amount would you expect the stock price to drop on the ex dividend date ...

If the tax rate of the average investor is reflected in t ...

You believe that the average investor is subject to a 20 percent tax rate on dividend payments.

Question:

You believe that the average investor is subject to a 20 percent tax rate on payments. If a firm is going to pay a $0.30 by what amount would you expect the stock price to drop on the ex-dividend date?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...