A few weeks ago, the board of directors of West Fraser Timber Corporation (WFT) declared a dividend of 20 cents per share. Shareholders on record will receive their dividend 26 days from today. The expected effective rate of return per year for WFT is 20%. Suppose it is 1:29:59 p.m. and the stock goes ex-dividend at 1:30 p.m. today. How much do you expect the stock price to drop (all else equal) at the instant the stock goes ex-dividend? (Please give your answer to 8 decimal places.)

Answer rating: 100% (QA)

To calculate the expected drop in the stock price we ... View the full answer