What is Ex-Dividend Date?
Grace HelbigWhat is Ex-Dividend Date?
When investing in stocks, it's important to understand the concept of ex-dividend date. This is the date on which a stock starts trading without the dividend that has been declared by the company. Here's everything you need to know about ex-dividend date:
What is Ex-Dividend Date?
Ex-dividend date is the date on which a stock begins trading without the dividend that has been declared by the company. This means that if you purchase a stock on or after the ex-dividend date, you will not receive the dividend payment. Instead, the dividend will be paid to the previous owner of the stock.
Why is Ex-Dividend Date Important?
Ex-dividend date is important because it affects the price of the stock. When a stock goes ex-dividend, its price typically drops by the amount of the dividend. This is because the dividend payment reduces the value of the company, and investors who purchase the stock after the ex-dividend date are not entitled to the payment.
How to Determine Ex-Dividend Date?
To determine the ex-dividend date of a stock, you can check the company'sdividend historyor use a financial website that provides this information. The ex-dividend date is usually set by the stock exchange on which the stock is traded.
What is the Record Date?
Therecord dateis the date on which a company determines which shareholders are entitled to receive the dividend payment. This date is usually a few days before the ex-dividend date, and shareholders who own the stock on or before the record date are eligible for the dividend.
What is the Payable Date?
Thepayable dateis the date on which the dividend payment is actually made to shareholders who are entitled to receive it. This date is usually a few weeks after the record date, and it can be found in the company's dividend announcement.
Conclusion
Ex-dividend date is an important concept for investors to understand, as it affects the price of stocks and determines who is entitled to receive dividend payments. By keeping track of ex-dividend dates and understanding how they work, investors can make informed decisions about buying and selling stocks.
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