Is the value of a dividend payout effected by the share price?

CreditCardChris

As a random example if you buy a share for £50 and you get £1 a year dividend then the price of the share drops 50%, does the dividend payout also get reduced to 50%?

Username999

No.         

ColdIron

No

You asked a very similar question recently

https://forums.moneysavingexpert.com/discussion/6117715/do-companies-increase-their-dividends-the-lower-the-stock-price-goes/p1

Prism

No but it does work the other way round. If you pay £50 for a share and then it pays a £1 dividend then the share price drops to £49.

Shimrod

I'm going to say 'it depends'. It doesn't follow that it will be cut bt the percentage fall in the share price, but a significant drop in share price may indicate the company is in trouble and the company may choose to reduce  the dividend paid out. As we have seen recently a number of companies are cancelling dividend payouts completely to retain the cash within the business (in some cases they have been told to by the government).

Likewise a share price may drop if a company announces a dividend cut - although again depending on why the dividend is being cut the share price could go up (if for a example it is seen as funds being retained to invest in the growth of the business).

Thrugelmir

If the share price falls 50% then the level of dividend that maybe paid could be under threat. As indicates that the company concerned isn't performing well financially. 

george4064

Given the OP is still confused by dividends it would very worthwhile for the OP to read about dividends before posting questions. 

https://www.investopedia.com/terms/d/dividend.asp