Re: Simple Dividends Question
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To keep the answer simple in line with your post title: The stock price decreases by the amount of the dividend.
Jimbo
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Makes sense. So if this is the case, then why does any give a [censored] about whether the stock pays a dividend or not?
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Divs are taxed differently, plus they can provide a sort of residual payment similar to a bond coupon payment if you are income driven and they are distributed on a regular basis. One may elect to keep a stock for a longer time so they can sell at a long-term tax rate and get the residual income of the dividend also at a tax rate lower than short-term capital gains.
If you don't care about any of that, it doesn't really make too much of a difference.
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