Term of the Day Friday, June 8, 2018
ex-dividend
Definition
A security which no longer carries the right to the most recently declared dividend; or the period of time between the announcement of the dividend and the payment. A security becomes ex-dividend on the ex-dividend date (set by the NASD), which is usually two business days before the record date (set by the company issuing the dividend). For transactions during the ex-dividend period, the seller, not the buyer, will receive the dividend. Ex-dividend is usually indicated in newspapers with an x next to the stock or mutual fund's name. In general, a stock's price drops the day the ex-dividend period starts, since the buyer will not receive the benefit of the dividend payout till the next dividend date. As the stock gets closer to the next dividend date, the price may gradually rise in anticipation of the dividend.
Use ex-dividend in a sentence
“ The ex-dividend was mentioned during the shareholder meeting as the individual wanted an immediate dividend but we had informed him otherwise. ”
“ You may find yourself in an ex-dividend period and you will need to figure out the best way to proceed. ”
“ In purchasing the stock, I wanted to make certain that I was entitled to the quarterly dividend and thus purchased it just prior to the ex-dividend date. ”
