With respect to the dividend-payment process,the price of a share of stock can logically be expected to drop on:
A) the payment date.
B) the date of record.
C) the ex-dividend date.
D) the declaration date.

Question

Quizplus · Accepted Answer

The ex-dividend date is the first day a stock trades without the dividend payment included in the price. Therefore, logically, the price of the stock can be expected to drop on this date as investors who are seeking the dividend have already purchased the stock by the date of record and the declaration date. The payment date is when the dividend is actually paid out to shareholders and does not typically affect the price of the stock. The declaration date is when the company announces its intention to pay a dividend, so it would not necessarily impact the stock price either.

With Respect to the Dividend-Payment Process,the Price of a Share