EBK CORPORATE FINANCE
4th Edition
ISBN: 9780134202778
Author: DeMarzo
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 17, Problem 2P
ABC Corporation announced that it will pay a dividend to all shareholders of record as of Monday, April 2, 2012. It takes three business days of a purchase for the new owners of a share of stock to be registered.
- a. When is the last day an investor can purchase ABC stock and still get the dividend payment?
- b. When is the ex-dividend day?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Kathy Snow wishes to purchase shares of Countdown Computing, Inc. The company's board of
directors has declared a cash dividend of $0.80 to be paid to holders of record on Wednesday, May
12. a. What is the last day that Kathy can purchase the stock (trade date) and still receive the
dividend? b. What day does this stock begin trading ex dividend? c. What change, if any, would you
expect in the price per share when the stock begins trading on the ex dividend day? d. If Kathy held
the stock for less than one quarter and then sold it for $39 per share, would she achieve a higher
investment return by (1) buying the stock prior to the ex dividend date at $35 per share and collecting
the $0.80 dividend or (2) buying it on the ex dividend date at $34.20 per share but not receiving the
dividend?
On August 8, 2023, Prudential Financial, Inc. (NYSE: PRU) announced the declaration
of a quarterly dividend of $1.25 per share of Common Stock, payable on September 14,
2023, to shareholders of record at the close of business on August 22, 2023. The New
York Stock Exchange set the ex-dividend date to be Monday, August 21. What was the
last day an investor could purchase the shares of Prudential on the New York Stock
Exchange and still receive the dividend?
If Frank Corporation sells 100,000 shares of its new $1 par value common stock to investors for $1 per share on June 1, 2011, the required journal entry would require: A debit to? A credit to?
Chapter 17 Solutions
EBK CORPORATE FINANCE
Ch. 17.1 - Prob. 1CCCh. 17.1 - Prob. 2CCCh. 17.2 - Prob. 1CCCh. 17.2 - In a perfect capital market, how important is the...Ch. 17.3 - Prob. 1CCCh. 17.3 - Prob. 2CCCh. 17.4 - Prob. 1CCCh. 17.4 - Prob. 2CCCh. 17.5 - Is there an advantage for a firm to retain its...Ch. 17.5 - Prob. 2CC
Ch. 17.6 - Prob. 1CCCh. 17.6 - Prob. 2CCCh. 17.7 - Prob. 1CCCh. 17.7 - Prob. 2CCCh. 17 - Prob. 1PCh. 17 - ABC Corporation announced that it will pay a...Ch. 17 - Prob. 3PCh. 17 - RFC Corp. has announced a 1 dividend. If RFCs...Ch. 17 - Prob. 5PCh. 17 - KMS Corporation has assets with a market value of...Ch. 17 - Natsam Corporation has 250 million of excess cash....Ch. 17 - Suppose the board of Natsam Corporation decided to...Ch. 17 - Prob. 9PCh. 17 - Suppose BE Press paid dividends at the end of each...Ch. 17 - The HNH Corporation will pay a constant dividend...Ch. 17 - Prob. 12PCh. 17 - Prob. 13PCh. 17 - Prob. 14PCh. 17 - Suppose that all capital gains are taxed at a 25%...Ch. 17 - Prob. 16PCh. 17 - Prob. 17PCh. 17 - Prob. 18PCh. 17 - Prob. 19PCh. 17 - A stock that you know is held by long-term...Ch. 17 - Clovix Corporation has 50 million in cash, 10...Ch. 17 - Assume capital markets are perfect. Kay Industries...Ch. 17 - Redo Problem 22., but assume that Kay must pay a...Ch. 17 - Harris Corporation has 250 million in cash, and...Ch. 17 - Redo Problem 22, but assume the following: a....Ch. 17 - Prob. 26PCh. 17 - Use the data in Table 15.3 to calculate the tax...Ch. 17 - Explain under which conditions an increase in the...Ch. 17 - Why is an announcement of a share repurchase...Ch. 17 - AMC Corporation currently has an enterprise value...Ch. 17 - Prob. 31PCh. 17 - Prob. 32PCh. 17 - Explain why most companies choose to pay stock...Ch. 17 - Prob. 34PCh. 17 - Prob. 35P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Susan Corp wants to pay dividends to their investors . On July 23, 2021, the company publicly announces that the company is going to pay the dividend to investors on record as of September 1, 2021. The dividend will be paid to investors on September 10, 2021. On what date will Susan Corp reduce retained earnings for these dividends? Group of answer choices July 23 September 1 September 10 December 31 Retained earnings is not reduced by dividends.arrow_forwardFiber Corporation declared a dividend of $.90 per share on April 20th to holders of record as of Monday, May1st. The dividend is payable on June 1st. You purchased 100shares of this stock on Wednesday, April 26th. How much dividend income will you receive on June 1st as a result of his declaration? A)$0 B)$2.25 C)$9.00 D)$22.50 E)$90.00arrow_forwardOn March 1st, Frank opens a brokerage account and sell shorts 200 shares of Doggie Treats Inc. at $60 per share. The initial margin requirement is 50%. a. What is the margin in Frank’s account when he first sells the stock? b. The stock pays a cash dividend of $1 on March 28th, and the share price falls to $50 per share by the end of March, what is the remaining equity in his account? c. What is the monthly rate of return on his margined position?arrow_forward
- Black Paua Inc. announced on May 1 that it will pay a dividend of $5 per share on June 15 to all holders on record as of May 31st. The firm's stock price closed today at $50 a share. Assume all investors are in the 28 percent tax bracket. If tomorrow is the ex-dividend date, what would you expect the opening price to be tomorrow morning assuming all else is held constant? $42.80 $45 $46.40 $44.96arrow_forwardOn March 1st, Frank opens a brokerage account and sell shorts 300 shares of Doggie Treats Inc. at $50 per share. The initial margin requirement is 50%. a. What is the margin in Frank's account when he first sells the stock? b. The stock pays a cash dividend of $1 on March 28th, and the share price falls to $40 per share by the end of March, what is the remaining equity in his account? C. What is the monthly rate of retur on his margined position?arrow_forwardYou are working for Medical Equipment Exports Group. Your corporation is going to pay an annual dividend of $5 per share and an extra dividend of $1.5 per share in 4 weeks. The company’s stock is currently listed and actively traded on the ASX. Required: The standard process of settlement in ASX is T+2. If tomorrow is the record date for dividend payment for Medical Equipment Exports Group, when is the ex-dividend date for trading of this share on the ASX? Calculate the ex-dividend price if the corporation’s closing price the day before ex-dividend date is $143.5, assuming the dividend flat tax rate is 17%. Medical Equipment Exports Group has an extra cash of A$645,000. The AUD/USD exchange rate in New York is 0.74659. The USD/AUD rate in Sydney is 1.38127. Is there any arbitrage profit possible? Set up an arbitrage scheme with the extra cash. What is the potential gain in the AUD dollar, disregarding bid-ask spread? Medical Equipment Exports Group considers which method of dividend…arrow_forward
- Reminder: Please make it in good accounting form. Question: What amount should be reported as Dividend Income?arrow_forwardBriefly explain what is meant by "protective put." On January 2, Michigan Mining declared a $25-per-share quarterly dividend payable on March 9th to stockholders of record on February 9. What is the latest date by which you could purchase the stock and still get the recently declared dividend? February 5 O February 9 February 7 February 4arrow_forward3) The Rent It Company declared a dividend of $.60 a share on October 20th to holders of record on Monday, November 1st. The dividend is payable on December 1st. You purchased 100 shares of Rent It Company stock on Wednesday, October 27th. How much dividend income will you receive on December 1st from the Rent It Company? H A) $1.50< B) $60.00< C) $15.00< D) $0 E) $6.00<arrow_forward
- If Friday, October 4, 2019, is the record date for ABC Corporation, when must an investor have purchased the stock in order to be entitled to receive a declared dividend? Select one: O a. Thursday, October 3rd Ob. Wednesday, October 2nd c. Tuesday, October 1starrow_forwardDedrick Inc. did not pay dividends in 2018 or 2019, even though 60,000 shares of its 7.5%, $50 par value cumulative preferred stock were outstanding during those years. The company has 900,000 shares of $2 par value common stock outstanding. Required: a. Calculate the annual dividend per share obligation on the preferred stock. (Round your answer to 2 decimal places.) b. Calculate the amount that would be received by an investor who has owned 3,100 shares of preferred stock and 29,000 shares of common stock since 2017 if a $0.40 per share dividend on the common stock is paid at the end of 2020. (Do not round intermediate calculations.) a. b. Annual dividend per share Total dividends received $ 3.75arrow_forwardRequired: How much is the Retained earnings, end - UNAPPROPRIATED?* How much is the total shareholders' equity at year-end?* What is the number of outstanding ordinary shares?* What is the number of outstanding preference shares?*arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License