Answer-first summary for fast verification
Answer: $28.50
**Explanation:** The correct answer is **A ($28.50)**. The ex-dividend date (ex-date) is the first day a share trades without the right to the upcoming dividend. Since buyers on or after the ex-date are not entitled to the dividend, the share price typically drops by the dividend amount on the ex-date. Here, the closing price on 19 August was $29.00, and the dividend is $0.50. Therefore, the share price on 20 August would adjust to $28.50 ($29.00 - $0.50). - **Option B ($29.00)** is incorrect because this reflects the pre-ex-date price, which includes the dividend. The price should decrease on the ex-date. - **Option C ($29.50)** is incorrect as it mistakenly adds the dividend to the pre-ex-date price, which is not how ex-dividend adjustments work. This would imply the dividend is included, which is not the case on the ex-date.
Author: LeetQuiz Editorial Team
Ultimate access to all questions.
An analyst gathers the following information about a company's shares:
$0.50$29.00
All else being equal, at the beginning of trading on 20 August, the company's shares will most likely trade at:A
$28.50
B
$29.00
C
$29.50
No comments yet.