If you own a stock that pays dividends, you know this to be false. The stock drops exactly by the amount of the dividend on the ex-dividend date. You can iden

If you own a stock that pays dividends, you know this to be false. The stock drops exactly by the amount of the dividend on the ex-dividend date. You can identify precisely what that date is if you know the amount of the dividend - the stock chart shows a discontinuity on that date. A simple thought experiment should make it clear why that is - Let's say a $100 stock has a $2 dividend, if the stock didn't drop by the amount of the dividend on the ex-dividend date, then I could simply purchase the stock, be the owner of record on the ex-dividend date, receive the dividend, and then just sell the stock immediately. I get a 2% return for holding the stock for a week or less. Clearly that doesn't happen.