Question

You own 180 shares of stock in Halestorm, Inc., that currently sells for $82.45 per share. The company has announced a dividend of $3.05 per share with an ex-dividend date of February 4. Assuming no taxes, what is the value of the stock on February 4

Answer 1

Answer:

New stock value = $79.40

Total stock value = $14,292

Explanation:

GIVEN the following ;

Number of shares of stock = 180

Current price = $82.45 per share

Dividend = $3.05 per share.

Ex dividend date = February 4

Value of stock on February 4 =?

The Ex dividend date may be regarded as the day whereby payment of dividend and reinvestment is held.

Assuming no taxes, The value of the stock will drop by the same amount of the current dividend on February 4.

Therefore,

New stock value = current stock price - dividend per share

New stock price = $82.45 - $3.05 = $79.40

New stock value = $79.40 per share.

Total stock value :

$79.40 × 180 = $14,292