On Dec. 9, the company will trade for $31 per share. The future earnings are still worth $30 per share, and the excess cash is still worth $1 per share, but anyone who buys the stock on this date or after will not receive the dividend of $4 per share payable on Dec. 11. (In this case, Dec. 9 is known as the ex-dividend date because it is the date at which a buyer of the stock will not receive the dividend. The stock trades at a price excluding the dividend, hence the term "ex-dividend.")
Put simply, on the ex-dividend date, the company is theoretically worth the previous day's closing price minus the upcoming dividend per share.
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