In **, dividends are often seen as a "sweet" return, which means that investors can receive additional cash gains from their holdings. However, many investors are confused after experiencing dividends: why didn't the money in my account increase after the dividends? Today, we will unravel this mystery and explore the truth behind the dividends.
First of all, we need to understand the nature of dividends. A dividend is the act of a company returning a portion of its earnings to shareholders in the form of cash. This means that dividends do not increase the market value of the company, nor do they increase the total amount of investment by investors. It simply transfers a portion of the company's profits into the hands of shareholders.
So, why do some investors think that money should increase after dividends? This may have something to do with their understanding of dividends. Some investors mistakenly view dividends as an "extra" gain, believing that it will increase their total investment amount like a share price**. However, in reality, dividends only return a portion of the value that investors already have to them in the form of cash, and do not create new value.
In addition, we also need to consider the impact of dividends on the stock price. On the dividend payment date, the company's share price is usually adjusted accordingly. This means that the share price after the dividend will be accordingly** to reflect that the company has paid a portion of its profits to shareholders. As a result, even if an investor receives a dividend, the total amount of their investment (the share price multiplied by the number of shares) may remain the same or even decrease.
Let's take an example to illustrate this concept: Suppose an investor holds 100 shares of a company**, the stock price is 10 yuan, and the total market value is 1000 yuan. The company announced a dividend of $1 per share. On the dividend payment date, investors will receive a cash gain of $100, but the share price will also be correspondingly ** to $9 shares. Therefore, the total investment of this investor is still 1,000 yuan (9 yuan shares * 100 shares + 100 yuan cash income), and it has not increased due to dividends.
To sum up, the reason why the money does not increase after the dividend is that the dividend itself does not create new value or increase the total amount invested. It simply returns a portion of the value that the investor already has to them in the form of cash. Therefore, investors should maintain a rational attitude when looking at dividends and do not expect excessive dividends to bring additional income.