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borishaifa [10]
3 years ago
5

Ginger, Inc., has declared a $5.40 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 20 percen

t. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $94.00 per share, and the stock is about to go ex dividend. What do you think the ex-dividend price will be
Business
1 answer:
lesantik [10]3 years ago
4 0

Answer: $89.68

Explanation:

The Ex-dividend measures how much a stock price drops as a result of the disbursement of dividends. It is calculated by subtracting the dividend from the current stock price.

In the above question the IRS require that taxes be withheld at the time that the dividend is paid.

This means that taxes have to be accounted for first before ex - dividend is calculated.

After tax dividend = 5.40 * ( 1 - 0.2)

After tax dividend = $4.32

Solving for Ex-dividend gives,

= 94.00 - 4.32

= $89.68

The ex-dividend price will be $89.68

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The money that remains after a firm has paid all of its expenses is known as corporate profit. Top-line revenue is the total amount of money received by a company from the sale of goods or services during the reporting period. From revenue, a company will pay its expenses. The amount that remains after expenses are paid is referred to as the business's profit.

Additionally, the U.S. Bureau of Economic Analysis (BEA) releases a quarterly statistic known as "corporate revenue " tha  compiles the net income of businesses as reported in the National Income and Product Accounts (NIPA). One of the primary sources of information on overall economic activity in the United States is the National Income and Product Accounts (NIPA), which are a component of the national accounts of the country.

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a

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