(Before the ex-dividend date, investors are entitled to the dividend; after, they are not.) The feeling has been that the stock will decline by the amount of the dividend on the exdividend date, so it really does not matter when the stock is purchased.

Shirley McDonald, the finance officer of the university, has just completed a study showing that over the years IVM's stock price on average declined by only 90 percent of the dividend per share on the ex-dividend date. She attributes this occurrence to the fact that a number of investors are interested in capital gains. As a result, these investors buy the stock after the ex-dividend date, and the impact of their purchases causes the stock to decline by less than the amount of the dividend. In view of this finding, should the university change the timing of its purchase of IVM stock? If so, how should it change?