28 ms·
I should have been more clear in that first line. I don’t understand where the concept of a valuation of a company dropping 1:1 proportionally with its dividend
by andrewmcwatters 6y ago
I should have been more clear in that first line. I don’t understand where the concept of a valuation of a company dropping 1:1 proportionally with its dividend payment came from.
- dmoy 6y agoBecause it's roughly what happens, absent other factors on the ex div day. https://www.investopedia.com/articles/investing/091015/how-dividends-affect-stock-prices.asp https://www.investopedia.com/articles/investing/091015/how-d... https://finance.zacks.com/stock-price-change-dividend-paid-3571.html https://finance.zacks.com/stock-price-change-dividend-paid-3... It's not 100% true, but it's a fair bit better approximation than the other end of the spectrum which is roughly "dividends create free money out of thin air".