If no price change occurs in a stock on the day that it announces its next dividend,it can be assumed that:
A) the stock market is inefficient.
B) the dividend was reduced.
C) the market was expecting this information.
D) technical analysts are not following this stock.

Question

Quizplus · Accepted Answer

If no price change occurs in a stock on the day that it announces its next dividend, it suggests that the market was already expecting this information and had baked it into the current stock price. This is because dividends are typically announced in advance and the market has already factored this information into the value of the stock. Therefore, the lack of price change indicates that the market's expectations were already in line with the actual announcement.

If No Price Change Occurs in a Stock on the Day