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    Stock Price Ex Dividend Date

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    Annas Pretzels announced that on May 1, 2004, that it will pay a dividend of $5.00 per share on June 15 to all holders on record as of May 31st. The firm's stock price is currently at $70 per share. Assume that all investors are in the 33% tax bracket. Given that the ex-dividend date is May 29, what should happen to Anna's stock price on May 29?

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    Solution Preview

    The stock price would fall by the after tax dividend amount. The reason is ...

    Solution Summary

    The solution explains the impact on stock price on ex dividend date.