If investors have a marginal tax rate of 20% and a firm has announced a dividend of $5;
A) The price of stock should decrease by $4 on the ex-dividend date
B) The price of the stock should decrease by $5 on the ex-dividend date
C) The price of the stock should increase by $5 on the ex-dividend date
D) The price of the stock should increase by $4 on the ex-dividend date
Correct Answer:
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