How dividends are
Profitable when price of the
Share get reduce on
Ex-dividend date by the same
amount of that of dividend?
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Dividends are beneficial for buy-and-hold investors not for short term holders. For long term investors, dividends are like earning interest on their holdings (or earning profit without selling shares), and long term investors are unfazed by small drop in price of stock relative to dividends paid.
Companies who pay regular dividends are fundamentally strong, which instills confidence in current shareholders and also attracts new buyers which in turn helps appreciate stock’s value, which is beneficial to long term investors.
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