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Price - now and ex-dividend

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The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be .50 per share, and there are 20,000 shares of stock outstanding. The market value balance sheet for Payout is shown on the following table.

Assets Liabilities and Equity
Cash $100,000 Equity $1,000,000
Fixed Assets 900,000

a. What price is Payout stock selling for today?

b. What price will it sell for tomorrow? Ignore taxes.

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Solution Summary

The solution explains how the determine the price today and when it goes ex-dividend

Solution Preview

a. We are given the market value balance sheet. This implies that the market value of ...

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