Updated on March 2, 2023
Ex-dividend means ‘without dividend payment’. The ex-dividend date or ‘ex-date’ is the day when the stock starts trading without the value of its dividend payment.
Ex Dividend explained
1. The ex-dividend date is set two days before the record date (record date is the date when an investor should be a shareholder in the company’s records) Those shareholders who possess shares on or one day before the record date are entitled to receive the dividend.
2. It is a general scenario that on the ex-dividend date, the stock price declines by the amount of the dividend declared. Thus, the price is known as ‘ex-dividend price’, as the stock price loses the value of the future dividend payment.
3. Anyone buying a stock on or after the ex-dividend date will not receive the dividend payment.