A dividend is not a return on an investment. Technically, the share price should drop to adjust to the new market capitilisation deducting the amount distributed to shareholders (ex-div).
Of course, the fact that a company pays dividends and provides an income stream to holders is attractive and can result in a higher share price. A great example is Telstra who would be absolutely hammered if it abandoned its dividend for those million of Mum & Dad shareholders.
WDS Price at posting:
68.0¢ Sentiment: LT Buy Disclosure: Held
