What is the Impact of Special Dividends on Share Prices?
Special dividends can have a significant impact on a company's stock price. Typically, the stock price will drop by the amount of the dividend on the ex-dividend date, as the value of the company decreases by the amount paid out. However, the announcement of a special dividend can also lead to a short-term increase in the stock price due to the positive signal it sends about the company’s liquidity and performance.