Question: Midnight Hour Inc has declared a $5.10 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15%. New IRS regulations require

Midnight Hour Inc has declared a $5.10 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15%. 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 to ex- dividend. What do you think the ex-dividend price will be? Step 1: Calculate the After-Tax Dividend Step 2: Ex-Dividend Price Please explain your answer. Thanks

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