You purchased a stock today.What should you expect if the stock goes ex-dividend tomorrow?
A) A dividend will be declared tomorrow.
B) A dividend will be paid tomorrow.
C) The stock price should decline tomorrow.
D) The stock price has already adjusted for the next dividend payment.

Question

Quizplus · Accepted Answer

When a stock goes ex-dividend, it means that shareholders who own the stock on that day (the record date) are eligible to receive the upcoming dividend payment. Since the dividend payment is no longer attached to the stock, the stock price usually declines by the amount of the dividend payment. Therefore, if you purchase a stock today and it goes ex-dividend tomorrow, you should expect the stock price to decline tomorrow.

You Purchased a Stock Today