You purchased CSH stock for $34 one year ago and it is now selling for $46. The

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You purchased CSH stock for $34 one year ago and it is now selling for $46. The company has announced that it plans a $12 special dividend. You are considering whether to sell the stock now or wait to receive the dividend and then sell.

a. Assuming 2008 tax rates, what ex-dividend price of CSH will make you indifferent between selling now and waiting?

b. Suppose the capital gains tax rate is 20% and the dividend tax rate is 38%, what ex-dividend price would make you indifferent now?

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Corporate Finance The Core

ISBN: 9781292158334

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Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Feb 29, 2024 04:00 AM

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You purchased CSH stock for $34 one year ago and it is now selling for $46. The

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CSH Stock Decision Analysis Scenario You bought CSH stock for 34 a year ago and its now at 46 The co...View the full answer

Corporate Finance The Core

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