economicz

Just work it through the formula. (Pw - Px) is the adjusted price.
Pw - Px = D * (1 - Td) / (1 - Tcg)
Let say marginal rate is 50% and capital gains rate is 25%.
Pw - Px = D * 0.67
In this case, D must decrease by 0.67 to keep the equation balanced. It might be easier to imagine the last term, (1 - Td) / (1 - Tcg), as a whole. If it’s greater than 1, ex-div price will increase by more than the dividend. If it is equal to 1, ex-div price will decrease exactly by the amount of dividend. If it is less than 1, the ex-div price must decrease by more than the dividend.
It’s easier to understand if you plug numbers.