ABC at the end of the year would be higher because it did not drop because it did not pay a dividend.
To me, I see that a dividend really does not benefit you. Why do people want dividend stocks so much when the example I used shows there is no benefit? Thank you.
The general conclusion is correct, that an investor should largely be indifferent to dividends and after taxes, dividends tend to be less efficient in most situations compared to 'creating' dividends through selling shares of a holding. They can be helpful for cash flow purposes and are often something that help an investor stay invested in the market, which has value. They also look a bit better in slower growth markets or weaker markets as the dividend offers more of a predictable return stream. So, they are not all 'bad' and paying a dividend properly requires responsible management of company capital that helps to keep management teams a bit more honest and think a bit more critically about the next best use of their capital. We tend to like companies that grow their dividend over time, opposed to companies that pay a high dividend/high yield. A lot of it is also simply style and preference as certain cohorts of investors require something with a bit more cash flow and stability.