If on January 3, 2014, a company declares a dividend of $1.50 per share, payable on January 31, 2014, then the price of the stock should drop by approximately $1.50 on January 31.

Question

Quizplus · Accepted Answer

The stock price typically drops by the dividend amount on the ex-dividend date, not the payment date. The ex-dividend date is usually set a few days before the record date, which is before the payment date.

If on January 3, 2014, a Company Declares a Dividend