a)
To determine: The ex-dividend price at which it brings the indifference among selling period and waiting period.
Introduction:
The date between the announcement date and payment date is the ex-dividend date. A stock that trades on the ex-dividend date is termed as stock on ex-dividend. A stock becomes ex-dividend when the person gets the payment of a dividend. When the ex-dividend date starts, the price ultimately falls down.
b)
To determine: The ex-dividend price that brings a difference when capital gain tax rate is 20% and
Introduction:
The date between the announcement date and payment date is the ex-dividend date. A stock that trades on the ex-dividend date is termed as stock on ex-dividend. A stock becomes ex-dividend when the person gets the payment of dividend. When the ex-dividend date starts, the price ultimately falls down.
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Corporate Finance, Student Value Edition (4th Edition)
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