If on January 2, 2008, a company declares a dividend of $1.50 per share, payable on January 31, 2008, to holders of record on January 17, then the price of the stock should drop by approximately $1.50 on January 15, which is the ex-dividend date.

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Quizplus · Accepted Answer

The ex-dividend date is typically two business days before the holder of record date, which in this case would be January 15. On the ex-dividend date, the stock price is expected to drop by approximately the amount of the dividend, as new buyers of the stock will not be entitled to the upcoming dividend payment. Therefore, the stock price should drop by approximately $1.50 on January 15.

If on January 2, 2008, a Company Declares a Dividend