I know the equation, and I’m trying to understand the concept behind it (so as to help me remember the relationships in the equation).

Basically there’s a larger share price drop when marginal tax rates on dividends are LOWER than marginal tax rates on capital gains (to investors). There’s a lower price drop when taxes on Dividends are relatively HIGH.

I don’t understand the reasoning behind this, and couldn’t grasp it from the CFAI text. can anyone help?? To me, if dividend tax rates are LOW, demand for stock on ex-div date would be high, so i don’t understand the price drop would be larger when dividend taxes are low…