InvestorQ : Will Bajaj Finance go down after the dividend data 11.07.2019?
Crowny Pinto made post

Will Bajaj Finance go down after the dividend data 11.07.2019?

Answer
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1 year ago


Normally, the dividends lead to a reduction in price of the stock because a dividend is paid out of the earnings of the company and hence reduces the value of the company. Normally, the stock price of a stock on the ex-dividend data goes down to the extent of the dividend. What you need to note is that the dividend of 300% is being paid out on a par value of Rs.2, which works to Rs.6 per share. On a market price of Rs.3400, this is less than 0.20% dividend yield so the impact of the dividends on the price will hardly be material. Normally, the impact of dividends on price is a lot more material for companies that have a high dividend yield of 4% and above.