Question: About cash dividend, which statement is NOT CORRECT? The drop in stock price by the amount of cash dividend makes the stock undervalued as it

About cash dividend, which statement is NOT CORRECT?

The drop in stock price by the amount of cash dividend makes the stock undervalued as it becomes cheaper.

The current stock price computed by DDM is called ex-dividend price, meaning the price that excludes the current cash dividend.

At dividend payout, the firm's book value and market value both decline by the same dollar amount per share.

Companys stock price will immediately decline in response to cash dividend payout.

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