value of a share of stock

sylmih | 06:12 Wed 17th May 2006 | Business & Finance

2 Answers

Why does the value of a share of stock depend on dividents?

Overseas bank accounts

What happens next? Old debt.....

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buildersmate

It is just one of the factors that it depends on. The dividend drives the amount of income return the shareholder gets on his/her investment. So the value of the share will go up or down (in part) dependent on the dividend being declared by the company.

BigMac

It is also affected by a stock/share going ex-dividend.

The dividend is paid at a future date to shareholders on the company's share Register on the Record Date; for example if the Record Date is today, the dividend might be paid on 17 June.

So tomorrow the shares will be cheaper to buy because they do not carry the right to the dividend.

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