Ex-Dividend Date Meaning and Definition – Investment Terms

Posted by Grace under Personal Finance on January 24, 2015

Some readers of this blog is asking me about the meaning of ex-dividend date, in stock investing, there are financial terms you should familiarize, and one of these investment terms is the word “dividend”.

Related Financial Terms: Stockholders Equity Definition

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Another way to make money in the stock market aside from capital gains is through dividends. A dividend can be a cash or stock. There are words you should know about dividends, and here they are;

  • Date of Declarations
  • Date of Record
  • Ex-Dividend Date
  • Date of Payment

Ex-Dividend Date Meaning and Definition – Financial Terms

The ex-dividend date is significant for investors in companies with stocks traded on the stock exchanges. To permit the compilation of the list of stockholders as of the record date, it is customary for the stock to go ex-dividend three business days before the date of record.

 Ex-Dividend Date Searching on Stock Brokerage Account
A stock is said to be selling ex-dividend on the day that it loses the right to receive the latest declare dividend.

A person who buys the stock before the ex-dividend date is entitled to receive the dividend; conversely, a stockholder who sells shares before the ex-dividend date does not receive the dividend.

Reference: Robert F. Meigs, Walter B. Meigs, Authors, “Accounting: The Basis for Business Decisions”, 1991 McGraw Hill Publishing Company – Excerpt on Corporations: Operations, earning per share, and dividends. Page 565

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