Imagine that Telephonic Industries has excess cash of $300,000 and is considering an immediate payment of this amount as an extra dividend. The firm forecasts that, after the dividend, earnings will be $450,000 per year. There are 100,000 shares outstanding. The cost of capital of the firm is 16.67%.

What is the price per share before and after the ex-dividend date?

Answer rating: 100% (QA)

To calculate the price per share before and after the exdividend date we can use the Dividend Discou... View the full answer