The system was also implicated in a payment crisis which hit the Calcutta stock exchange in March, when a sharp fall instock prices left a group of brokers with big carry forward positions unable to honour their financial commitments.
When Kohlberg Kravis Roberts leveraged Storer Broadcasting, Drexel created a payment-in-kind preferred as the junior security and insisted KKR give warrants to buy common stock as a sweetener.
The stock had rallied earlier in the day as the company announced the release of a mobile payment system, but jumped as CEO Andrew Mason gave an TV interview to CNBC.
If you do wish to account for this, enter the value of the dividend payment with a negative sign on the date a stock goes ex-dividend, and add the number back in when the dividend is received.