For the past 10 years, Green Thumb Shrubbery has paid a very handsome dividend such that the dividend yield normally has been approximately 10 percent.The holder-of-record date for the next dividend payment is tomorrow.Sally Anderson just bought Green Thumb's stock a few minutes ago.As a result and assuming the stock's price has been stable for the past couple of days, the price Sally paid for her stock should have been
A) greater than it was a couple of days ago because she will get the next dividend paid by Green Thumb, which is expected to be fairly substantial.
B) less than it was couple of days ago because she will not receive the next dividend paid by the company.
C) approximately the same as it was a couple of days ago because the stock's price has been stable and the next dividend should not affect the current price of the stock.
D) differ from what it was a couple of days ago because the prices of all stocks constantly fluctuate; but there is not enough information to determine whether the price will be higher or lower than it was previously.
E) None of the above is a correct answer.
Correct Answer:
Verified
Q21: A 2-for-1 stock split
A)increases the number of
Q22: Why is the ex-dividend date important to
Q23: The following facts apply to your company:
Q24: Which of the following influences dividend policy?
A)constraints
Q26: All else equal, a "normal" stock split
A)generally
Q27: According to your text, the ex-dividend date
Q28: The date on which a firm's board
Q29: If you are considering purchasing a stock
Q38: Makeover Inc.believes that at its current stock
Q49: A reverse split reduces the number of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents