SIE Exam Practice Question 116

Correct Answer: C

Explanation:

The opening price of ABC Corporation should be $25.59 on December 6 ($25.34 + $0.25). Since a dividend of $0.25 per share was announced after the market closed on December 5, each share became more valuable by that amount. It's always possible for stocks to not trade at what they're supposed to, given a free market, but assuming rational market behavior, ABC stock would trade at the sum of its closing price ($25.34) plus the declared dividend amount ($0.25): $25.59.