To calculate the amount of the drop, the traditional method is to view the financial effects of the dividend from the perspective of the company. Since the company has paid say £x in dividends per share out of its cash account on the left hand side of the balance sheet, the equity account on the right side should decrease an equivalent amount. This means that a £x dividend should result in a £x drop in the share price.
To calculate the amount of the drop, the traditional method is to view the financial effects of the dividend from the perspective of the company. Since the company has p,aid say £x in dividends per share out of its cash account on the left hand side of the balance sheet the equity account on the right side should .decrease an equivalent amount This means that a £x dividend should result in a £x dro.p in the share price