XYZ Declared a Dividend of $0

question 31

Multiple Choice

XYZ declared a dividend of $0.80 a share.The ex-dividend date is tomorrow.All else constant,you would expect the opening price tomorrow morning to be:

• A)lower by an amount approximately equal to the after-tax value of the dividend
• B)the same as today's closing price since the dividend is expected
• C)$0.80 lower than today's closing price
• D)higher by an amount approximately equal to the after-tax value of the dividend
• E)$0.80 higher than today's closing price

---

Definitions:

Payments For Capital

The returns or disbursements made to fund providers in a business, typically in the form of interest or dividends.

Investment

The allocation of resources, usually money, with the expectation of generating an income or profit.

Profit

The financial gain achieved when the total revenues generated from business activities exceed the total costs and expenses incurred.

Market Value

The ongoing price for the transaction of assets or services within the marketplace.