Suppose that the tax rate on dividends is 28%, and the tax rate on capital gains is
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Suppose that the tax rate on dividends is 28%, and the tax rate on capital gains is zero. Eagle Net Resources is about to pay a $2 per share dividend.
a. By how much will Eagle Net's share price fall when the stock goes ex-dividend?
b. Will anything happen to the share price on the payment date when the dividend cheques are sent our?
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
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