The Share Price Falls When a Dividend Is Paid Because

question 67

Multiple Choice

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

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

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Definitions:

Nearest Cent

Rounding a monetary amount to the closest cent, commonly used in cash transactions to simplify payment.

Evaluate

To evaluate or ascertain the worth, importance, or state of something by conducting a thorough examination and analysis.

Evaluate

To calculate the value of an expression or determine the outcome of an equation based on given values or conditions.

Mixed Number

A number consisting of an integer and a proper fraction.