> 3% of earnings going to shareholders just does not at all mean the company drops by 3% in value. But this is not what's being claimed. Dividends are measure

> 3% of earnings going to shareholders just does not at all mean the company drops by 3% in value. But this is not what's being claimed. Dividends are measured relative to stock price, not earnings. And a 3% dividend - that is, a per-share dividend equal to 3% of the share price - absolutely does cause the price to decrease by 3%. It's pretty clear why this must be the case - it's one of the weakest possible forms of the efficient-markets hypothesis. If it wasn't the case, people would buy (sell) the stock just before the dividend and sell (buy) just after for a nearly guaranteed profit.