Expect the stock price to drop on the ex-dividend day

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LMN Corporation, a real-estate corporation, is planning to pay a dividend of 0.50 per share. Most of the investors in LMN are other corporations, who pay 40% of their ordinary income and 28% of their capital gains as taxes. However, they are allowed to exempt 15% of the dividends they receive from taxes. If the shares are selling at $10 per share, how much would you expect the stock price to drop on the ex-dividend day?

Reference no: EM13724955

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