Question

Gloria's boutique has 4,000 shares of stock outstanding at a price per share of $19. what will the price per share be if the firm pays a $1.20 per share dividend

Answer 1

The price per share will be the Ex-dividend price.

The market price per share = $ 19

Dividend per share = $ 1.20

Ex-dividend price per share = $ 19 - $ 1.20 = $ 17.80

Thus, the price per share = $ 17.80