Question

Jenny plans to sell 200 shares of ExxonMobil stock. Exxon-Mobil has just declared a $0.45 cash dividend per share payable in 40 days to registered owners 20 days from now. If on the ex-date the price of ExxonMobil is $61.55 per share, show the total proceeds and the source of the proceeds to Jenny Anderson if she sells before the close on the ex-date or waits until the morning after the ex-date. Assume a world of no taxes

Answer 1

Solution :-

Given data,

Number of shares = 200 shares

Cash dividend per share = $0.45

Ex-date the price of ExxonMobil = $61.55

Here , we need to find out the Total revenue and the source of the proceeds to Jenny Anderson if she sells before the close on the ex-date or waits until the morning after the ex-date .

First ,

Total revenue = 200 * $61.55

= $12,310

Total revenue = $12,310

Next,

Computation of revenue if Jenny sells the shares after tax ex-date :-

Particulars	Amout
Revenue	= 200 * [ $61.55 - $0.45 ] = 200 * $61.1 = $12,220
Dividend income	= 200 * 0.45 = $90
Total revenue	= $12,220 + $90 = $12,310

Assume a world of no taxes :-

In a universe of no expenses the incomes are the equivalent .