Costco's 'Special' Payout
In a real-time world, there is almost no lag between the time new information becomes known and its reflection in share pricing.
Costco Wholesale (COST) closed at $96.51 on Tuesday, Nov. 27. Its announcement of a one-time $7 dividend to be paid before year-end triggered a gap opening to $100.44 the next morning. The $3.93 jump in price was quite rational. Seven dollars pre-tax is worth $5.95 after-tax at this year's 15% federal income tax rate for qualified dividends. And it drops to $4.55 after-tax if the top rate of 35% is applied....255 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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