What is Ex-Dividend?
Ex-dividend is a financial term used to describe a stock that has gone ex-dividend, meaning the buyer of the stock will not receive the most recently declared dividend. When a company declares a dividend, the stock will go ex-dividend on a specific date prior to the record date. The ex-dividend date is usually two business days before the record date.
History of Ex-Dividend
The concept of ex-dividend dates has been around since the early days of stock trading. The idea is that the company needs to know who owns the stock on the record date in order to determine who is eligible to receive the dividend. By setting an ex-dividend date, the company can ensure that the stock is transferred to the new owner before the record date.
The ex-dividend date is also important for traders who are looking to buy a stock just before the dividend is paid. By buying the stock before the ex-dividend date, the trader will be eligible to receive the dividend. However, if the trader buys the stock after the ex-dividend date, they will not be eligible to receive the dividend.
Comparison Table
| Term | Definition |
|---|---|
| Ex-Dividend | A stock that has gone ex-dividend, meaning the buyer of the stock will not receive the most recently declared dividend. |
| Record Date | The date on which the company determines who is eligible to receive the dividend. |
| Ex-Dividend Date | The date prior to the record date on which the stock will go ex-dividend. |
Summary
Ex-dividend is a financial term used to describe a stock that has gone ex-dividend, meaning the buyer of the stock will not receive the most recently declared dividend. The ex-dividend date is usually two business days before the record date, and is important for traders who are looking to buy a stock just before the dividend is paid. For more information about ex-dividend, you can visit websites such as Investopedia, The Balance, and Yahoo Finance.
See Also
- Dividend
- Dividend Yield
- Dividend Payout Ratio
- Dividend Reinvestment Plan (DRIP)
- Dividend Tax
- Dividend Growth
- Dividend Aristocrats
- Dividend Capture
- Dividend Stocks
- Dividend Dates
