A firm has announced a cash dividend of $3 dollar per share. Assuming an efficient market,...
A firm has announced a cash dividend of $3 dollar per share. Assuming an efficient market, if the tax rate on dividend is 15% and the firm’s current stock price is $15, the firm’s stock price are expected to be _________ on ____________.
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$12.45; ex-dividend date. |
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$12; announcement date. |
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$12; ex-dividend date. |
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$12.45; payment date. |
Homework Answers
Since it is an efficient market, the effects of tax will be priced on ex dividend date too so share price would be =(15-3) +(3*15%)
=12+ .45 = 12.45
So. Option (A) $12.45, Ex dividend date
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