A company has the following balance sheet: Assets: 45,000,000 Liabilities: 15,000,000
The equity section is simple: Retained earnings and 5,000,000 shares of common stock.
The current market price is 80% of book value. You own 50,000 shares of the stock.
The board declared a dividend of $0.40 a share two months ago to shareholders of record one month ago.
What do you expect the value of your stock holdings will do on the ex-dividend date?