Which of the following is correct?

Question

Quizplus · Accepted Answer

Stock prices typically increase as the next dividend date approaches due to the anticipated income from the dividend. Once the stock goes ex-dividend (meaning new buyers will not receive the upcoming dividend), the stock price usually drops by approximately the amount of the dividend, reflecting the fact that the dividend value is no longer included in the stock price. This is because the dividend payment reduces the company's assets by the amount distributed, theoretically reducing the value of each share by a corresponding amount.

Which of the Following Is Correct