Ex-dividend date

Ex-dividend date

Ex-dividend date is one of key dates related to paying a dividend. The ex-dividend date is the day when a dividend and an underlying share split. Before the ex-dividend date, if the seller sells the share, he also sells the right to receive the dividend. The buyer pays the price and gets the share plus the right. On and after the ex-dividend date, if the seller sells the share, he retains the right to get the dividend. The buyer gets the share only.

Prior to this date, the share is said to be cum-dividend (with dividend). On and after this date the stock becomes ex-dividend (without dividend).

Usually, the ex-dividend date predates the record date by two business days. On the record date (or holder-of-record date), the company closes its books and creates a list of those who will receive a dividend. On a payment date, the company sends checks. You only need to own the stock one day to be entitled to receive the dividend payment. If you buy before the ex-dividend date, and sell on the ex-dividend date or after, you receive the dividend payment.

External links

* [http://www.sec.gov/answers/dividen.htm SEC page on Ex-Dividend Date]
* [http://www.nasd.com/RulesRegulation/NoticestoMembers/2000NoticestoMembers/NASDW_003997 NASD (Nasdaq) document on ex-dividend dates]
* [http://www.dividendinvestor.com/ US, UK and Canadian Ex-Dividend Date Research Center]


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