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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › DIVIDENDS
Why calculating dividend yield why is ex dividend price considered and not cum dividend price considered?
Because if you buy a share when it is cum div you will then receive the current dividend and so the net investment is smaller (and is the ex div price).
so basically you choose ex div since it is smaller?
Not simply because it is smaller, but because that is the net amount being invested.