Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259277214
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 14.1, Problem 14.1CCQ
Summary Introduction

To discuss: The changes in the stock level when it goes ex-dividend.

Introduction:

The company’s stock level drops when the company declares the dividend. The reason behind this is that when the stock prices goes down with the same amount of dividend, the dividend automatically goes down; this will ultimately have an effect on company’s reduced value.

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