The firms shares on the ex-dividend date

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Texas Utilities pays a quarterly dividend of $0.77. Assume that the stock is trading at $35 per share, and that tomorrow is the ex-dividend date. Based on the past behavior of the firm’s shares on the ex-dividend date, you believe that the drop in the price of the firm’s shares will only be around 85% of the dividend amount paid. Assuming that you work for a non-profit (tax exempt) institution, suggest a dividend capture trading strategy around the ex-dividend day.

Reference no: EM131300382

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