[user_named]

Wrong. You claim that AAPL goes from $100 to $99 when it distributes $1. The only way that mean anything is if you also claim that the next year, AAPL hands out $1 and drops to $98.

Clearly that is not how the stock price has developed over the years. Dividend paying stocks don't decline in price. They increase in price, just like any other stock. And some decline, like any other.

[hsjqllzlfkf]

No, you're wrong. OP said that on the instant that $1 dividend is paid, the stock price goes from $100 to $99. The extrapolation that next year the stock price will go from $99 to $98 is _your_ extrapolation, and wrong. The moment after the the dividend is paid the stock's price might go up, might go down. So on next dividend's payment it might go from 50 to 49 or from 200 to 199. The conclusion that this implies that that stock payment dividends always go down is also _your_ conclusion and also wrong.

> Wrong

You're not smart enough to be this arrogant.

[MikeDelta]

Dividend paying stock has no limitations on growth compared to non div-paying stock. However when (cash) div-paying stock goes ex div, the stock price drops with that amount.

(Even reporters sometimes forget about that and try to find reasons what news caused a stock to drop instantly.)

[venusenvy47]

What is the mechanicism that drops the price? Does the market automatically adjust the ask price? Or do buyers instantly start offering a lower price at that moment?

[quickthrowman]

Market makers drop the bid/ask by the ex-dividend amount immediately after it is announced, or arbitrageurs short the stock when the ex-dividend amount is announced and then they cover their short once the ‘overvalued’ stock they sold is back at fair value.

[atombender]

In the US, the price adjustment is done by the stock exchange itself; the price on open is adjusted exactly by the dividend amount. It's not some collective emergent behavior of the market. (I don't know what non-US exchanges do.)

[quickthrowman]

> Dividend paying stocks don't decline in price.

They decrease in price by the amount of the dividend when the dividend is paid out (it’s actually when it goes ex-dividend, the payout may not happen for a few weeks). It’s extremely simple to understand.

The valuation of the company includes all cash, assets, debt, etc. If AAPL pays out a $1 per share dividend on 15.73B shares, they have $15.73B less cash. The valuation of the company drops by $1/share the instant after the dividend, and so does the share price.

The price action of AAPL after the dividend has been priced in has no relation to the dividend itself.

> Wrong. You claim that AAPL goes from $100 to $99 when it distributes $1. The only way that mean anything is if you also claim that the next year, AAPL hands out $1 and drops to $98.

A stock falling in value by the ex-dividend amount happens every single time a dividend is paid out.