50.1K

Verified Solution

Link Copied!

Dividend payment Personal Finance Problem Kathy Snow wishes to purchase shares of Countdown Computing, Inc. The company's board of directors has declared a cash dividend of $0.79 to be paid to holders of record on Wednesday, Sep. 21 a. What is the last day that Kathy can purchase the stock and still receive the dividend? b. What day does this stock begin trading ex dividend? c. What change, if any, would you expect in the price per share when the stock begins trading on the ex-dividend day? d. Kathy believes that she will be able to sell the stock for $43.62 in a few months. Tomorrow is the ex-dividend date, and the stock price now is $39.62. Is she better off buying the stock now so she can capture the dividend, or should she wait until tomorrow, miss the dividend, and buy the stock at a slightly lower price? a. What is the last day that Kathy can purchase the stock (trade date) and still receive the dividend? (Select the best answer below.) O A. Sunday, Sep. 18 O B. Friday, Sep. 16 O C. Wednesday, Sep. 21 OD. Monday, Sep. 19 b. What day does this stock begin trading ex dividend? (Select the best answer below.) O A. Tuesday, Sep. 20 OB. Wednesday, Sep. 21 OC. Friday, Sep. 16 OD. Sunday, Sep. 18 c. What change, if any, would you expect in the price per share when the stock begins trading on the ex-dividend day? (Select the best answer below.) O A. Stock price will not change. OB. Stock price will rise by the amount of the dividend ($0.79). O C. Stock price will drop by the amount of the dividend ($0.79). d. Kathy believes that she will be able to sell the stock for $43.62 in a few months. Tomorrow is the ex-dividend date, and the stock price now is $39.62. Is she better off buying the stock now so she can capture the dividend, or should she wait until tomorrow, miss the dividend, and buy the stock at a slightly lower price? (Select the best answer below.) O A. She would be better off buying the stock at $38.83 and not taking the dividend. O B. She would be slightly better off buying the stock at $39.62 and taking the dividend

Answer & Explanation Solved by verified expert

See Answer