Question
What is the likely impact on a stock's price when dividends are paid?
Multiple choice question.
The price will not be affected.
The price will rise.
The price will fall.
Multiple choice question.
The price will not be affected.
The price will rise.
The price will fall.
Answers
GPT-4o mini
The likely impact on a stock's price when dividends are paid is:
**The price will fall.**
When a dividend is paid, the stock price typically drops by approximately the amount of the dividend on the ex-dividend date. This is because the company's assets are reduced by the payout, making the company less valuable on paper.
**The price will fall.**
When a dividend is paid, the stock price typically drops by approximately the amount of the dividend on the ex-dividend date. This is because the company's assets are reduced by the payout, making the company less valuable on paper.