Wyatt Oil pays a regular dividend of $2.50 per share.Typically,the stock price drops by $2.00 per share when the stock goes ex-dividend.Suppose the capital gains tax rate is 20%,but investors pay different tax rates on dividends.Absent transactions cost,the highest dividend tax rate of an investor who could gain from trading to capture the dividend is closest to:
A)0%.
B)20%.
C)24%.
D)36%.

Question

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The Answer of Wyatt Oil pays a regular dividend of $2.50 per share.Typically,the stock price drops by $2.00 per share when the stock goes ex-dividend.Suppose the capital gains tax rate is 20%,but investors pay different tax rates on dividends.Absent transactions cost,the highest dividend tax rate of an investor who could gain from trading to capture the dividend is closest to:
A)0%.
B)20%.
C)24%.
D)36%.

Wyatt Oil Pays a Regular Dividend of $2