A good example of dividend behaviour can be seen in the 16th December dividend from Sycamore Networks (see <a href="http://www.google.com/finance?q=scmr" rel="nofollow">http://www.google.com/finance?q=scmr</a>). This dividend was announced on the 18th November (roughly a month before the effective date). The share price doesn't change at that point, but on the effective date it falls by $9.70, almost exactly the dividend amount of $10. I chose this example as Sycamore gave out a quite ludicrous amount of cash (something like 35% of the company value) so the price drop is very obvious. Another unusual feature of the dividend is that the pay date is actually before the effective date. The dividend is paid on the 15th December, even though its the people who own the shares at the market open on the 16th who qualify for the dividend. This comes about due to a rule that NASDAQ have that if a distribution is greater than 25% of a company value, then the effective date is set to be the day after the pay date.<p>I think that while there is a lot that is unpredictable about the stock market, you can be fairly sure that on a dividend's effective date, the share price will fall by roughly the amount of the dividend. It won't be exact due to all the other factors which would affect a stock's price on any day, but it will be roughly correct.