You bought kira stock for $50 and now it is selling for $75. The company has announced that it plans a $15 special dividend. (please show ALL calculations)
a) Assuming a capital gains and a dividend tax rate of 15%, if you sell the stock or wait and receive the dividend, will you have the different after-tax income?
b) if the capital gains tax rate is 20% and the dividend tax rate is 40%, what is the difference betweeen the two options in part a)?