Forum Archive Index - June 2000

["Oliver Shapleski" <oliver.shapleski@vuw.ac.nz>]

And if the company didn't pay any dividend then the price a few weeks later
would be a few cents higher....
Oliver

>        The price dosent drop for long, after a few weeks its back to its
> normal level
>          nick



> > Jeremy, two words.  Fuzzy logic.  Unfortunately your worked example
>  completely misses the totally obvious.
> > > A payment of a dividend AUTOMATICALLY and ALWAYS drops the share
price.
> > Watch Telecom go ex-dividend on Tuesday and observe the share price.
All
> > other things being equal the price of the share will drop by the amount
of
> > the dividend less tax.  Historically shares go ex-dividend at a price
down
> > 75% of the amount of the dividend.  Thus all things being equal when
> Telecom
> > goes ex-div the price of the share will fall by .75 x 11.5 cents.  The
75%
> > amount will vary depending on the tax structures of the country
concerned
> > and the proportion of institutional investors vs small investors.
> >
> > If you'd like to rework your example I'd be happy to comment on it then.
> >
> > Oliver
> >
> >
>
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