Taggart Transcontinental Has Announced a $2 Dividend

question 73

Multiple Choice

Taggart Transcontinental has announced a $2 dividend.If Taggart's last price cum-dividend is $45,then,assuming perfect capital markets,what should its first ex-dividend price be?

• A)$0
• B)$2
• C)$43
• D)$45

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Definitions:

Financial Leverage

Employing leveraged capital to enhance the expected returns on an investment.

Operating Leverage

The degree to which a company uses fixed operating costs, whereby a small change in sales significantly affects profitability.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volume, emphasizing the impact of fixed costs.

EBIT

Earnings Before Interest and Taxes represents a metric for gauging a firm's profit, specifically excluding expenses related to interest and taxes.