If investors do not like dividends because of the additional taxes that they have to pay, how...

Question:

If investors do not like dividends because of the additional taxes that they have to pay, how would you expect stock prices to behave on the ex-dividend date?

Dividend

Dividend is an income stream from investments in shares just like interest is the income stream from investments in bonds however unlike interest, dividends are not paid regularly, their payment depends on the discretion of management.

Answer and Explanation:

In general situation when investors like the dividend, prices after the declaration of dividend shoot up and cum- dividend prices are more than the...

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Homemade Dividends: Definition & Examples

from Finance 101: Principles of Finance

Chapter 16 / Lesson 2
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