Ginger, Incorporated, has declared a $8 per share dividend. Suppose capital gains are not taxed, but dividends are taxed aT 18 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $83 per share, and the stock is about to go ex-dividend. What do you think the ex-dividend price will be?

Ginger, Incorporated, has declared a $8 per share dividend. Suppose capital gains are not taxed, but dividends are taxed aT 18 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $83 per share, and the stock is about to go ex-dividend. What do you think the ex-dividend price will be?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 5P

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Estes Park, Inc., has declared a dividend of $5.90 per share. Suppose capital gains are not taxed, but dividends are taxed at 20 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $110 per share, and the stock is about to go ex-dividend. What do you think the ex-dividend price will be?
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