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Nuetrik [128]
3 years ago
6

Schaeffer Shippers announced on May 1 that it will pay a dividend of $1.20 per share on June 15 to all holders on record as of M

ay 31st. The firm's stock price closed today at $42 a share. Assume all investors are in the 28 percent tax bracket. If tomorrow is the ex-dividend date, what would you expect the opening price to be tomorrow morning assuming all else is held constant
Business
1 answer:
VLD [36.1K]3 years ago
7 0

Answer:

$41.14

Explanation:

Declared dividend per share = $1.20

Tax on declared dividend per share = $1.20 * 28% = $0.3360

Net Declared dividend per share = $1.20 - $0.3360 = $ 0.864

Firm's closing stock price per share today = $42

Opening share price tomorrow = $42 - $0.8640 = $41.1360, approximately $41.14.

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