The Share Price Falls When a Dividend Is Paid Because

question 31

Multiple Choice

The share price falls when a dividend is paid because the reduction in cash decreases th?

• A) current account of the firm.
• B) liabilities of the firm.
• C) market value of assets.
• D) equity of the firm.

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Definitions:

Nominal Interest Rate

The nominal interest rate, which reflects the raw rate of interest prior to being adjusted for inflation and represents the apparent value of financial dealings.

Market Basket

A selection of goods and services used to track price changes and inflation in an economy, representing the typical purchases made by consumers.

CPI

The Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, used as an indicator of inflation.

Market Basket

A selected set of goods and services used to track inflation and the cost of living or to define a beneficiary's set of consumable products.