Re: Simple Dividends Question
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But if the stock price will just drop by the amount of the dividend, then doesn't that offset the 6.3% gain? How do we benefit? If we wanted cash, couldn't we just sell some of the stock before the dividend?
Sorry to be so obtuse but I just don't understand. [img]/images/graemlins/confused.gif[/img]
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OK, back to the original question then. It's just a question of how the market is going to value a stock and if someone values a stock at $10 pre-dividend, they're going to value it at $9 post-dividend, right?
Maybe you are confused about dividend date vs ex-dividend date. Dividends go to whoever owns a stock on the day before the ex-dividend date, but the actual dividends are distributed later.
Look up some stock with a high dividend and see how the price varies w/ the ex-div date if you want to convince yourself.
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