...The individual who wrote the article on "Free Money Dividends" kinda got off track and some what of a tangent! Granted there may be a few investors that think this way but very few I'm sure.
...Investors that invest for dividends are well aware of the name of the game, however some still buy to capture the dividend. That is what should be done, but buying at the correct time is the key. Buying post x-day will usually get the best price for next the next dividend!
No, it isn't, Your example proves that it isn't free money. You said take 1000 shares at $10. That's $10,000. As you say, after reinvestment at $9.50 you get 52.6 more shares. That gives you a total of 1,052.6 shares at $9.50. That equals $10,000.
You start with $10,000 and you end up with $10,000. Where's the free money?