Determining the dividends and taxes


Lee Ann Inc., had declared a $5.60 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15%. New IRS regulations require that taxes be withheld when the dividend is paid. Lee Ann sells for $75 per share, and the stock is about to go ex dividend. What do you think the ex-dividend price will be?

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Finance Basics: Determining the dividends and taxes
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