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the rest of the passive-aggressive investors downvote the stock price by exactly the dividend amount when dividends are given This is the expected result if ma
by orangecat 3y ago
the rest of the passive-aggressive investors downvote the stock price by exactly the dividend amount when dividends are given
This is the expected result if markets are correctly pricing stocks. The value of a company is its assets plus its future income streams. When a company pays a dividend, its cash assets decrease, so the value of its stock should decrease by that same amount.
- s1artibartfast 3y agoI don't know what to make of all these strange objections to completely normal and rational business processes. People describe them as if they are somehow a bad thing. The only thing your description is missing is that while the total market cap goes down, the individual share price should go up because the number of outstanding shares is smaller. This is how the company transfers value to the shareholder that has not sold their stock.
- dheera 3y agoBut that way dividends are useless though. I'd much rather dividends be issued on random dates to random shareholders so that the market cannot predict when they happen, just a bunch of random people anonymously get dividends deposited each time, and as long as you stay invested for a long time you get dividends at the same average rate as everyone else.