Question
For the past 10 years, Green Thumb Shrubbery has paid a very handsome dividend such that the dividend yield normally has been approximately 10 percent.
For the past 10 years, Green Thumb Shrubbery has paid a very handsome dividend such that the dividend yield normally has been approximately 10 percent. The holder-of-record date for the next dividend payment is tomorrow. Sally Anderson just bought Green Thumb's stock a few minutes ago. As a result and assuming the stock's price has been stable for the past couple of days, the price Sally paid for her stock should have been
a. | greater than it was a couple of days ago because she will get the next dividend paid by Green Thumb, which is expected to be fairly substantial. | |
b. | less than it was couple of days ago because she will not receive the next dividend paid by the company. | |
c. | approximately the same as it was a couple of days ago because the stock's price has been stable and the next dividend should not affect the current price of the stock. | |
d. | differ from what it was a couple of days ago because the prices of all stocks constantly fluctuate; but there is not enough information to determine whether the price will be higher or lower than it was previously. | |
e. | None of the above is a correct answer. |
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