CashOut,Inc.has a current share price of $50.If CashOut plans to pay a $1 dividend,then if we ignore the effect of taxes we would expect the price of CashOut shares to change by what amount on the ex dividend date?

Question

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On the ex dividend date, the stock price is expected to decrease by the amount of the dividend payment, which in this case is $1. This is because investors who buy the stock on or after the ex dividend date will not be entitled to receive the upcoming dividend payment, leading to a decrease in demand for the stock and a drop in its price.