Dividend Payment Kathy Snow wishes to acquire shares in Countdown Computing, lnc. The company's board of directors declared a cash dividend of $ 0.80 to be paid to record holders on Wednesday, May 12.
P12-2
Dividend Payment Kathy Snow wishes to acquire shares in Countdown Computing, lnc. The company's board of directors declared a cash dividend of $ 0.80 to be paid to record holders on Wednesday, May 12.
to. What is the last day that Kathy can buy the shares (trade date) and still receive the dividend?
b. On what day does this share begin to trade "ex-dividend"?
c. What change, if any, would you expect in the price per share when the shares began trading on the ex-dividend date?
If Kathy held the stock for less than a quarter and then sold it for $ 39 per share, would she achieve a higher return on investment by 1) buying the stock before the ex-dividend date at $ 35 per share and collecting the dividend from $ 0.80, or 2) buy it on the ex-dividend date at $ 34.20 per share, but without receiving the dividend?
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