CAF-7 · Chapter 9 · Question 3 of 15
When shares are traded 'ex-dividend (XD)', which of the following statements accurately describes the situation?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Buyers of shares at XD price are not entitled to receive the upcoming dividend payment
Explanation
When a share is marked 'ex-dividend', it means the seller, not the buyer, will receive the recently declared dividend. Consequently, the XD share price drops to exclude the value of that dividend.
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