--- john hull <[EMAIL PROTECTED]> wrote: "Now the suprise tax cut comes into effect. The price of the stock should jump to P'=(1-0)D/r=D/r. Thus, there should be merely a one off jump in the share price by the amount P'-P=[D/r]-[(1-T)D/r]=(D+T)/r."
Mistake #1, (D+T)/r is greater than the price itself. I don't think the rest depends on that. Back to the drawing board for that part. Sorry about that. -jsh __________________________________________________ Do you Yahoo!? Yahoo! Mail Plus - Powerful. Affordable. Sign up now. http://mailplus.yahoo.com
