If Investors Do Not Like Dividends Because of the Additional

question 16

Multiple Choice

If investors do not like dividends because of the additional taxes that they have to pay, how would you expect stock prices to behave on the ex-dividend date?

• A)Fall by more than the amount of the dividend
• B)Fall exactly by the amount of the dividend
• C)Fall by less than the amount of the dividend
• D)Cannot be predicted.

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Definitions:

Physiological Changes

Alterations in the body's normal biological functions, which can result from health conditions, environmental factors, or developmental stages.

James-Lange Theory

A theory of emotion suggesting that physiological arousal precedes the experience of emotion.

Physiological Changes

Alterations in the body's normal biological functions or processes, which can occur due to various factors such as stress, exercise, or illness.

Emotion

A multifaceted mental state that encompasses a personal sensation, physical reaction, and an action or expressive reaction.