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Air Taxi, Inc. has declared a $10.00 per-share dividend. Suppose capital gains are not taxed,...

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Finance

Air Taxi, Inc. has declared a $10.00 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 20% and new regulations require that dividends are taxed when paid. Air Taxi stock sells for $118 per share. What will the ex-dividend price be?

Dividend per share $10.00
Tax rate 20%
Price $118.00

$126.00
$105.50
$110.00
$108.80

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