Business, 06.04.2020 08:35 naseem94

Sorsi has declared a 15% stock dividend. If the stock was selling for $34 before the ex-dividend date, what should its price be on the ex-dividend date?

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Answer from: guazet7650

The price on the ex-dividend date should be $28.9.

Explanation:

Ex Dividend Price Formula:

ΔP = D.(1 - $T_{D}$ )

where,

P = Price of the Stock

$T_{D}$ = Tax on the Dividend.

Therefore,

Ex Dividend Price = 34 . (1 - $\frac{15}{100}$ )

= 34. ( $\frac{100 - 15}{100}$ )

= 34 x $\frac{85}{100}$ = $\frac{2890}{100}$ = 28.9

Stock (likewise capital stock) of a company, is the entirety of the offers into which responsibility for enterprise is separated. In American English, the offers are by and large known as "stock". A solitary portion of the stock speaks to fragmentary responsibility for company in relation to the all out number of offers. This commonly qualifies the stockholder for that portion of the organization's income, continues from liquidation of benefits (after release of every single senior case, for example, made sure about and debt without collateral), or casting a ballot influence, regularly separating these up in relation to the measure of cash every stockholder has contributed.

A price is the amount of installment or pay given by one gathering to another as a byproduct of one unit of merchandise or administrations. A price is impacted by both creation expenses and interest for the item. A price might be dictated by a monopolist or might be forced on the firm by economic situations.

Ex-dividend portrays a stock that is exchanging without the estimation of the next dividend installment. The ex-dividend date or "ex-date" is the day the stock beginnings exchanging without the estimation of its next dividend installment. Ordinarily, the ex-dividend date for a stock is one business day before the record date, implying that a financial specialist who purchases the stock on its ex-dividend date or later won't be qualified to get the proclaimed dividend. Or maybe, the dividend installment is made to whoever claimed the stock the day preceding the ex-dividend date.

The ex-dividend price change quantifies the drop in the stock price as the stock goes ex-dividend. Truth be told, the offer price consistently drops after the ex-dividend date. That is on the grounds that cash is leaving the organization and along these lines the financial specialist's possession in the organization is useless. Luckily, there is an ex dividend price formula that permits us to ascertain the change in the offer price.

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Sorsi has declared a 15% stock dividend. If the stock was selling for $34 before the ex-dividend dat...