Desde Investopedia

TERM OF THE DAY

Ex-Dividend Ex-dividend is a classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be given ex-dividend status if a person has been confirmed by the company to receive the dividend payment. A stock trades ex-dividend on or after the ex-dividend date (ex-date). At this point, the person who owns the security on the ex-dividend date will be awarded the payment, regardless of who currently holds the stock. After the ex-date has been declared, the stock will usually drop in price by the amount of the expected dividend.

Breaking it Down: When a company decides to declare a dividend, its board of directors establishes a record date. This is the date when a person must be on the company’s record... Read More