The price of the stock is only the last value it traded at. As the dividend is meant to be paid that day, in the perfect world it should drop almost immediately by the exact amount of the dividend.
However this doesn’t mean the stock can’t also still go up and down for reasons other than the dividend.
Let’s just call a perfect world. A $100 stock is paying a $5 dividend. As soon as the dividend is paid, that stock should be valued at $95.
Latest Answers