Stephens, Inc. recently declared a dividend of $2 per share, but the stock price only dropped...
Stephens, Inc. recently declared a dividend of $2 per share, but the stock price only dropped by$1.60 cum- date/ex-date. What is the implied tax rate for Stephens, Inc. investors?
Homework Answers
Implied Tax Rate = [ Div Paid - Price Drop ] / Div Paid
= [ $ 2 - $ 1.60 ] / $ 2
= 0.4 / 2
= 0.2 i.e 20%
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