If a shared closed at $10 on the day before the ex-dividend date, and the upcoming dividend is $0.20, then on the ex-dividend date (all other things being equal), the shares will start the trading day at:

A. $9.8
B. $10
C. $10.2

Correct Answer: A

On the ex-dividend date, the money value of the upcoming dividend should be subtracted from the previous day's closing price, because the shares no longer carry the right to the next dividend payment.