How exactly one benefits when they get dividends as the stock price falls by the same amount. So virtually you are getting nothing and losing nothing?

General
2

The dividend earned is totally tax free at the hands of the investor and the capital gains amount is that much reduced in your hands (because the share value reduces) thus reducing your tax liability.

3

Because basically you have already paid for the dividends which you are getting in your bank accounts. So you are getting nothing…you just got what you paid upfront…Right?
Suppose stock is trading at Rs.300. You buy 1000 shares. Total Value = Rs.3,00,000 Now if Rs.50 dividend is announced. You got Rs.50,000 in your account. Now after ex-date stock is trading at Rs.250. Remaining value of shares = 250*1000 = 250000. Total money = 50,000+250000 = 300000. So isn’t it the same?

4

@nithin
@siva
Can u pls enlighten this answer ?

5

Usually when the dividend is announced, stock prices go up by that much. It then drops on the ex-dividend date.

6

That is what the question is :

[How exactly one benefits when they get dividends as the stock price falls by the same amount. So virtually you are getting nothing and losing nothing?]

7

The price appreciates on announcement of dividend usually. So there is a gain right?

8

@HSL, Read this. Might not be clear but you should understand what I’m trying to imply.

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