Question: Midnight Hour Inc has declared a 5 10 per share dividend Suppose
Midnight Hour Inc., has declared a $5.10 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. Midnight Hour sells for $83 per share, and the stock is about to go ex-dividend. What do you think the ex-dividend price will be?
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