Question 7

ABC has just announced that is is planning to pay a dividend of $3.9 per share. Before the announcement the share price of ABC was $37.7. Assume that the tax rate on capital gains is 15%, the tax rate on dividends is 3%. By how much will you expect the share price of ABC to change on the ex-date. Round your answers to two decimals (do not include the $-symbol in your answer). If you expect a positive change (share price will increase) enter a positive number. If you expect a negative change (share price will decline) enter a negative number.