Asked by
Shannon Gatewood
on Dec 01, 2024
Verified
As the ex-dividend date passes:
A) the market price of the stock drops by about 150% of the amount of the dividend.
B) brokers suspend sales of the stock for two business days to avoid arguments between buyers and sellers over who gets the dividend.
C) an investor who purchases the stock prior to the ex-dividend date receives the dividend and an investor who purchases the stock after the ex-dividend date does not.
D) All of the above
Ex-Dividend Date
The specific date on which a stock is traded without the right to receive the next dividend payment.
Market Price
Refers to the current price at which an asset or service can be bought or sold in a open and competitive market.
Stock Drops
A decline in the market price of a company's shares.
- Gain insight into the clientele effect and its effect on the formulation of dividend policies.
Verified Answer
JM
Learning Objectives
- Gain insight into the clientele effect and its effect on the formulation of dividend policies.