The Ex-Dividend Date: ABC Co

question 33

Multiple Choice

The ex-dividend date: ABC Co. stock is currently trading at $25.70 per share. The company pays a regular cash dividend of $0.40 every quarter. Tomorrow is ex-dividend day for the upcoming regular dividend. The tax rate on dividends is 15 percent. Assuming there is no new information released about the company, how much do you expect the company's stock to trade for tomorrow?

• A) $0.40
• B) $25.24
• C) $25.30
• D) $25.36

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Definitions:

Interest

Reflects the cost of borrowing money or the compensation earned through deposit funds, typically expressed as an annual percentage rate.

Intrapreneurship

The practice of fostering an entrepreneurial spirit within an existing company, encouraging employees to pursue innovative projects.

Profitable New Products

Goods or services recently introduced to the market that generate earnings exceeding their cost of production.

Larger Organisation

An organization that is significant in size, possibly with multiple departments, a wide range of functions, and a large number of employees.