It will not drop exactly 4/share...this is not a preferred stock ...common shares trade at a multiple of EPS, cash flow, or revenue. The upside is there if you believe that the company will continue to grow EPS in the future. At $3.55/share and a no growth multiple of 8.5X EPS...there's your possible reason to own the stock.
Exactly. You buy the stock after the div pay date if you still think there will be a buy out. The mkt cap will be lower and perhaps then someone will come in to shop. I think personally nobody wanted this dog. I sold yeterday on the down grade. Was holding it with no success.