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\"Priced\" into a stock
Company A's current stock price is $10. Upon releasing the news that the company will sell part of its asset and pay shareholders a special dividend of $2, Company A's stock price jumped to $12.
Since everyone knows this and it is already "priced" into the stock, can one make money in this situation? I think the key to answering this question is knowing [based on historical events] whether or not a company's stock price drops at the equivalent of its dividends after paying to shareholders. I may be wrong but do enlighten me. |
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