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Author: codyklein Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46858  
Subject: Re: Dividends: Stupid Questions Date: 10/12/2004 6:41 PM
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1. Does a stock typically drop by the value of its dividend after an ex-dividend date? Why or Why not?
As a general rule, no adjustment is made for ordinary cash dividends or distributions. A cash dividend or distribution by most issuers will generally be considered "ordinary" unless it exceeds 10% of the aggregate market value of the underlying security outstanding.

2. Do any traders make a living 'shopping' for dividends by buying before, and selling after a dividend date?
Wouldn't know but would guess yes.

3. If I bought Microsoft, should I expect the share price to drop by $3.00 after November 17?
Yes, the price will be adjusted from the previous close at the opening the next day. What happens after that is anyone's guess. Also all option strike prices will be adjusted down $3.00.

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