Question

On which of the following dates does IBM stock price drop for the amount of IBM’s...

On which of the following dates does IBM stock price drop for the amount of IBM’s quarterly dividend?

Announcement Date

Ex Date

Record Date

Payment Date
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Answer #1

A buyer who buys share on Ex-date or afterwards will receive the dividend. Hence the price gets adjusted on the ex-date.

In the given case, price drops on the ex-date for the quarterly dividend.

Others:

Price may get adjusted in the market on the announcement of dividend but it is not the correction by the amount of dividend

Ex date is based on Record date, mostly one day before in the T+1 settlement.

Payment date has no relevance in price adjustment since price gets adjusted ahead of it, on the ex-date.

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