Does a stock really dip in price on the ex-dividend date? And why would it do this?
The stock price is what people think a company is worth, this is made up of When a company pays out a dividend the money in the company’s bank account reduces, therefore the value of the company reduces.    When a company says they are going to pay a larger dividend than expected, we start to expect they are going to make more profit next year as well. So stock price tends to go up when a company says it is increasing the dividend, but down on the day then money leaves the companies bank account.   There is normally many months between the two events.
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### Instruction:
Does a stock really dip in price on the ex-dividend date? And why would it do this?

### Response:
The stock price is what people think a company is worth, this is made up of When a company pays out a dividend the money in the company’s bank account reduces, therefore the value of the company reduces.    When a company says they are going to pay a larger dividend than expected, we start to expect they are going to make more profit next year as well. So stock price tends to go up when a company says it is increasing the dividend, but down on the day then money leaves the companies bank account.   There is normally many months between the two events.