An investor currently owns 6104 shares of LIWK Inc. LIWK Inc. has a high-dividend-payout policy and this year will pay $5 cash dividend on its shares selling currently at $69. Assume that an Investor: wants a low-dividend-payout policy. is now taxed at 15% on capital gains and 15% on dividend distributions. originally paid a price for these shares equal to their current price. If an investor need only $500, how many shares should be acquired by the Investor on ex-date in order to undo the dividend policy of LIWK Inc.?
An investor currently owns 6104 shares of LIWK Inc. LIWK Inc. has a high-dividend-payout policy and this year will pay $5 cash dividend on its shares selling currently at $69. Assume that an Investor: wants a low-dividend-payout policy. is now taxed at 15% on capital gains and 15% on dividend distributions. originally paid a price for these shares equal to their current price. If an investor need only $500, how many shares should be acquired by the Investor on ex-date in order to undo the dividend policy of LIWK Inc.?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An investor currently owns 6104 shares of LIWK Inc. LIWK Inc. has a high-dividend-payout policy and this year will pay $5 cash dividend on its shares selling currently at $69.
Assume that an Investor:
wants a low-dividend-payout policy.
is now taxed at 15% on
originally paid a price for these shares equal to their current price.
If an investor need only $500, how many shares should be acquired by the Investor on ex-date in order to undo the dividend policy of LIWK Inc.?
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