What Will Happen to the Price of the Stock Once

question 2

Multiple Choice

What will happen to the price of the stock once the stock goes ex-dividend?

• A) It will decrease.
• B) It will increase.
• C) It will stay the same.
• D) One cannot determine what will happen to the price of the stock in this situation.

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Definitions:

Economic Profit

Revenue minus the opportunity cost of resources used; usually less than the accounting profit.

Accounting Profit

Revenue minus explicit cost.

Factors of Production

The resources used in the creation of goods and services, traditionally categorized into land, labor, capital, and entrepreneurship.

Opportunity Cost

The real cost of an item: what you must give up in order to get it.