Question: Lee Ann, Inc., has declared a $6.60 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 20 percent. New IRS regulations

Lee Ann, Inc., has declared a $6.60 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 20 percent. New IRS regulations require that taxes be withheld when the dividend is paid. Lee Ann sells for $94.60 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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