Question

You own 280 shares of stock in Halestorm, Inc., that currently sells for $83.95 per share....

You own 280 shares of stock in Halestorm, Inc., that currently sells for $83.95 per share. The company has announced a dividend of $3.55 per share with an ex-dividend date of February 4. Assuming no taxes, what is the value of the stock on February 4?

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Answer #1

With no taxes we would expect the stock price to drop by exactly the amount of the dividend, so the new stock price will be:

New stock price = $83.95 – 3.55

New stock price = $80.40

Your total stock investment will be worth:

Stock value = 280 × $80.40

Stock value = $22,512

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