minus-squareammonium@lemmy.worldtoMicroblog Memes@lemmy.world•Line go uplinkfedilinkEnglisharrow-up0·edit-23 months agoImagine you have 10 stocks worth $10 each. Scenario 1: There is $1 dividend per stock. You now have 10 stocks worth $9 each for a total of $90 in stocks and $10 in cash. Scenario 2: There is no dividend but you decide to sell 1 stock, you now have 9 stocks of $10 for a total of 90$ in stocks and $10 in cash. These scenario’s are equivalent unless the stock wasn’t priced correctly. linkfedilink
minus-squareammonium@lemmy.worldtoMicroblog Memes@lemmy.world•Line go uplinkfedilinkEnglisharrow-up0·3 months agoA dividend is just a forced sale of your stock linkfedilink
Imagine you have 10 stocks worth $10 each.
Scenario 1: There is $1 dividend per stock. You now have 10 stocks worth $9 each for a total of $90 in stocks and $10 in cash.
Scenario 2: There is no dividend but you decide to sell 1 stock, you now have 9 stocks of $10 for a total of 90$ in stocks and $10 in cash.
These scenario’s are equivalent unless the stock wasn’t priced correctly.