as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
system
does a stock really dip in price on the ex-dividend date? and why would it do this?
user
the stock price is what people think a company is worth, this is made up of when a company pays out a dividend the money in the company’s bank account reduces, therefore the value of the company reduces.    when a company says they are going to pay a larger dividend than expected, we start to expect they are going to make more profit next year as well. so stock price tends to go up when a company says it is increasing the dividend, but down on the day then money leaves the companies bank account.   there is normally many months between the two events.
assistant