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Two Weeks Ago, Jensen's Declared a Dividend of $1

Question 34

Multiple Choice

Two weeks ago, Jensen's declared a dividend of $1.34 a share.The ex-dividend date is tomorrow.All else constant, which one of the following is the best estimate of Jensen's opening stock price tomorrow?


A) $1.34 lower than today's closing price
B) Today's closing price minus an amount approximately equal to the aftertax value of the dividend
C) The same as today's closing price since the dividend is expected
D) $1.34 higher than today's closing price
E) Today's closing price plus an amount approximately equal to the aftertax value of the dividend

Correct Answer:

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