Effects of dividend on stcok prices* Though stock dividends do not result in any actual increase in value for investors at the time of issuance, they have an effect on stock price similar to that of cash dividends. After the declaration of a stock dividend, the stock's price often increasesHow Dividends Affect Stock Prices * Dividends can affect the price of their underlying stock in a variety of ways. While the dividend history of a given stock plays a general role in its popularity, the declaration and payment of dividends also has a specific and predictable effect on market prices.