Question

Blazer Sports Store is preparing to pay its quarterly dividend of $7.75 a share this quarter. The stock closed at $105.64 a share today. What will the ex-dividend stock price be if the relevant tax rate is 19 percent and all else is held constant

Answer 1

Answer:

$99.3625

Explanation:

The computation of the ex-dividend stock price is shown below

= Stock closing price - {stock dividend × (1 - tax rate)}

= $105.64 - {($7.75 × (1 - 0.19)}

= $105.64 - $6.2775

= $99.3625

Hence, the ex-dividend stock price is $99.3625

We simply applied the above formula so that the ex-dividend stock price could come