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TED’s shares trade at $21/share. If with ex dividend for a cash dividend of $7/ share....

TED’s shares trade at $21/share. If with ex dividend for a cash dividend of $7/ share. what should TED’s share price be at the close of the markets after cash dividend?

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Answer #1

Stock price after cash dividend:

= Stock price before cash dividend – Cash dividend

= $21 - $7

= $14

Hence, stock price at close of market is $14

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