Ask Question
BusinessBusiness
24 October, 09:53

Ginger, Inc., has declared a $6.30 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 20 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $94.45 per share, and the stock is about to go ex dividend. What do you think the ex-dividend price will be

+2
Answers (1)
  1. 24 October, 10:05
    0
    Answer: $89.41

    Explanation:

    In the stock market, the price is a stock on its ex dividend date is usually marked down by it's amount of dividend. Eg, if a stick trades at $5 and declares a $1 dividend, the stock will be sold at $4.

    In the above scenario we'd have to account for tax in the formula so this is what it will look like,

    Ex Dividend Price = Pre dividend Price - Cash dividend Payment

    = $94.45 - $6.3 x (1 - 0.2)

    = $94.45 - $5.04

    = $ 89.41

    The Ex dividend Price is $89.41

    If you need any clarification do react or comment.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Ginger, Inc., has declared a $6.30 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 20 percent. New IRS ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
In 2019, the CEO of Crimson, Inc., entertains seven clients at a skybox in Memorial Stadium for a single athletic event during the year. Substantive busi-ness discussions occurred at various times during the event.
Answers (1)
Suppose a nation has a labor force of 45.5 million workers and an unemployment rate of 6.15%. Instructions: Round your answers to two decimal places. a. How many workers in this nation are unemployed? million b.
Answers (1)
On September 30 of last year, Rex received some investment land from Holly as a gift. Holly's adjusted basis was $50,000 and the land was valued at $40,000 at the time of the gift. Holly acquired the land five years ago.
Answers (1)
What is an important step to take before entering your first data into your database? O A. Reporting O B. Querying O C. Planning O D. Sorting
Answers (1)
When is it acceptable under NASAA rules for an IAR to exercise discretionary authority over the account of an investor? A) Only when the IAR gives written notification to the investor with the confirmation of the trade.
Answers (1)
New Questions in Business
What factors does the government consider in deciding whether to approve the merger?
Answers (1)
John is responsible for processing applications submitted by applicants. He is performing which level of management?
Answers (1)
Carson company on july 15 sells merchandise on account to tayler co. for $2,000, terms 2/10, n/30. on july 20 tayler co. returns merchandise worth $800 to carson company. on july 24 payment is received from tayler co. for the balance due.
Answers (1)
How many types of management are there in business?
Answers (1)
During 2021, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2021, cash collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be uncollectible.
Answers (1)
Home » Business » Ginger, Inc., has declared a $6.30 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 20 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $94.
Sign Up Forgot Password?