Problem 17-7 on Ex-dividend Price based on Chapter 17 Payout Policy Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market price of $15 per share. Natsam’s board has decided to payout this cash as a one-time dividend. a.What is the ex-dividend price of a share in a perfect capital market? Problem 17-15 on Distribution to Shareholders based on Chapter 17 Payout Policy Suppose that all capital gains are taxed at a 25% rate and that the dividend tax rate is 50%. Arbuckle Corporation is currently trading for $30 and is about to pay a $6 special dividend. a.Absent any other trading frictions or news, what will its share price be just after the dividend is paid? Problem 17-19 on Dividend Capture Strategy based on Chapter 17 Payout Policy Que Corporation pays a regular dividend of $1 per share. Typically, the stock price drops by $0.80 per share when the stock goes ex-dividend. Suppose the capital gains tax rate is 20%, but investors pay different tax rates on dividends. Absent transactions costs, what is the highest dividend tax rate of an investor who could gain from trading to capture the dividend? Problem 23-5 on Preferred Stock based on Chapter 23 Raising Equity Capital Three years ago, you founded your own company. You invested $100,000 of your money and received 5 million shares of Series A preferred stock. Since then, your company has been through three additional rounds of financing.
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