On the Date of Record the Stock Price Drop Is

question 39

Multiple Choice

On the date of record the stock price drop is:

• A)a full adjustment for the dividend payment.
• B)a partial adjustment for the dividend payment because of the tax effect.
• C)zero because it happens on the ex-dividend date.
• D)zero because it happens on the payment date.
• E)None of the above.

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Definitions:

Decision

The process of making choices among alternative courses of action.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not affect future business decisions.

Future Costs

Costs that will be incurred in the future, impacting decisions on investments, production, and other business activities.

Relevant

Relates to or directly impacts the subject under discussion.