Business, Legal & Accounting Glossary
The ex-dividend date is the date on which sellers rather than buyers of a stock have a right to a declared dividend. When a company declares a dividend, it sets a date of record that determines which shareholders receive the dividend. After the record date is set, the stock exchanges or the National Association of Security Dealers set the ex-dividend date. In most cases, the ex-dividend date is two business days before the record date: If the record date is on Thursday, the ex-dividend date is on Tuesday. A buyer of the shares on Monday will have rights to the dividend; a buyer on the ex-dividend date of Tuesday will not. Similarly, a seller of the shares on Monday won’t receive the dividend; a seller on the ex-dividend date of Tuesday will. The stock price before the ex-dividend date will reflect the dividend payment; the stock price on or after the ex-dividend date is reduced to reflect its absence. On and after the ex-dividend date the stock is marked with an “x” in stock tables to show its trading “ex-dividend.”
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This glossary post was last updated: 1st April, 2020 | 4 Views.