If on January 3 a company declares a dividend of $1.50 per share,payable on January 31 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

This is true.The stock price will drop on the ex-dividend date,which is two days prior to the holder of record date,which is well before the actual January 31 payment date.Note,though,that because the dividend is taxable,the price decline may be somewhat less than the full amount of the dividend.

If on January 3 a Company Declares a Dividend of $1.50