If on January 3,2015,a company declares a dividend of $1.50 per share,payable on January 31,2015,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.

Question

Quizplus · Accepted Answer

When a company declares a dividend, the stock price usually drops by the amount of the dividend on the ex-dividend date, which is two business days before the record date. In this case, the ex-dividend date falls on January 15, so the stock price should drop by approximately $1.50 on that day. Therefore, the statement is true.

If on January 3,2015,a Company Declares a Dividend of $1