Why should we expect a firms stock price to decline by approximately the amount of the dividend payment on the ex dividend date Why do U S stock prices generally fall by less than the amount of the dividend payment ...

The firm has removed an amount of cash equ ...

Why should we expect a firms stock price to decline by approximately the amount of the dividend

Question:

Why should we expect a firm’s stock price to decline by approximately the amount of the payment on the ex-dividend date? Why do U. S. stock prices generally fall by less than the amount of the payment?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...