2. (29 points) Schaeffer Shippers announced on May 1, 2009, that it will pay a dividend of $5.00 per share on June 15 to all holders on record after market close on May 28th. The firm's stock price on May 28 fluctuated close to $70 per share and there is no net movement in the market on May 28 and in addition no other announcements form Schaeffer Shippers. Assume that all investors are in the 15% tax bracket with respect to dividends. Given that the cum-dividend date is May 28, so all investors holding the stock after the market close receive the dividend, while the ex-dividend date is May 29. Assuming zero transactions costs, provide a brief analysis of what would happen in the markets on May 28 and May 29 from the perspective of the two short-term investment strategies facing an investor that purchases the stock for $70 at market open on May 28 (Pt-1) and the price of the stock remains basically unchanged over the course of trading on May 28. Report the expected change in the stock price at market open on May 29 (P.) relative to the closing price on the previous day Pt-1 and the expected dividend payment of $5.00 on June 15. 1 Come to a final conclusion about the expected movements in Schaeffer's stock price, and the expected delta in the stock price, at market open on May 29. 2. (29 points) Schaeffer Shippers announced on May 1, 2009, that it will pay a dividend of $5.00 per share on June 15 to all holders on record after market close on May 28th. The firm's stock price on May 28 fluctuated close to $70 per share and there is no net movement in the market on May 28 and in addition no other announcements form Schaeffer Shippers. Assume that all investors are in the 15% tax bracket with respect to dividends. Given that the cum-dividend date is May 28, so all investors holding the stock after the market close receive the dividend, while the ex-dividend date is May 29. Assuming zero transactions costs, provide a brief analysis of what would happen in the markets on May 28 and May 29 from the perspective of the two short-term investment strategies facing an investor that purchases the stock for $70 at market open on May 28 (Pt-1) and the price of the stock remains basically unchanged over the course of trading on May 28. Report the expected change in the stock price at market open on May 29 (P.) relative to the closing price on the previous day Pt-1 and the expected dividend payment of $5.00 on June 15. 1 Come to a final conclusion about the expected movements in Schaeffer's stock price, and the expected delta in the stock price, at market open on May 29