Dividend Policy and Firm Value: You Own 7,000 Shares of No-Drip

question 19

Multiple Choice

Dividend policy and firm value: You own 7,000 shares of No-Drip Co. The company has decided to pay a special dividend of $1.00 per share. Dividend payments are taxed at 15 percent. You intend to reinvest your dividend back into the company, but the company does not have a dividend reinvestment program. To reinvest through your broker, you will have to pay a $46 commission. If the company's stock is trading at $12.43 following the dividend payment, how many additional shares will you be able to purchase?

• A) 563 shares
• B) 481 shares
• C) 478 shares
• D) 475 shares

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Definitions:

Body Language

Nonverbal communication through physical behaviors such as gestures, facial expressions, and posture.

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Pain caused by damage to or dysfunction of the nervous system, often presenting as a burning or tingling sensation.

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Pain Impulse

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