Ex-Date or Ex-Div Date is always encountered once a listed company declares to give out dividends to stockholders either in the form of cash or stocks.
Actually there are three dates mentioned in the dividend announcements of companies. It is the ex-date or ex-div date, record date and the payment date but the most important date that should be watched out is the ex-date or ex-div date.
The ex-date or ex-div date is the cut-off date where all stockholders who hold a share of stocks as of the previous day is entitled for a share in the dividend allocation.
For example, if a company declares to give out dividends and the ex-date or ex-div date specified is August 3, all stockholders holding a stock share until August 2 will be entitled to the dividend payment.
Mostly the dividend declaration announcement is being done one or two weeks before the ex-date, that gives time for investors to buy the stocks in order to be entitled for a dividend. The stock price during this period usually goes up.
If you want, you can sell your stock shares the day after the ex-date or ex-div date … you will still be entitled for the dividend but usually, the stock’s price drops down during this period.
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