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Suppose that all capital gains are taxed at a 30 % ?rate, and that the dividend tax rate is 42 % . Arbuckle Corp. is currently trading for ?$39 ?, and is about to pay a ?$6 special dividend. a. Absent any other trading frictions or? news, what will its share price be just after the dividend is? paid? Suppose Arbuckle made a surprise announcement that it would do a share repurchase rather than pay a special dividend. b. What net tax savings per share for an investor would result from this? decision? c. What would happen to? Arbuckle's stock price upon the announcement of this? change? a. Absent any other trading frictions or? news, what will its share price be just after the dividend is? paid? Absent any other trading frictions or? news, the share price just after the dividend is paid is ?$nothing . ?(Round to the nearest? cent.)

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Financial Management, Finance

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