When a company pays a dividend, its share price drops by roughly the amount paid — the cash left the business and arrived in your account. That is a transfer, not extra return. Dividends are useful for income and can signal discipline, but 'high dividend' is not a synonym for 'good investment'.
Check yourself
On the day a dividend is paid, the share price typically…
Rises by the dividend
Falls by roughly the dividend correct
Is unaffected
The cash used to be inside the company and now is not. The value moved; it was not created.
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