Re: ELSS Help
Dear Vicky,
how are you doing?
when corporates pay dividends, its actually from our pant pocket to shirt pocket.
Dividend is the same whether it is from a corporate (stock) or from AMC (fund).
Its our money, put to use and then paid back when there is profit to enjoy. Share price or NAV definitely incorporates the divident or bonus. In stocks the dividend is so small (1 rs dividend for a 300 rs Zee TV for example..) that its effect on stock price is almost negligible. But when bonus is announced the share price does respond accordingly.
When corporates are in aggressive investment mode, they dont pay dividends. When dividend is around the corner, you can see the future contracts of that stock being discounted.
when there is dividend the company's cash decreases (probably book value, I;m not sure.) and that will be reflected in share price. (just like bonuses..).
Tax treatment of dividends from both are quite different.