Ex-dividend date
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Ex-dividend date is the date when the right to the dividend leaves the stock. This date was established by stockbrokers to avoid confusion, and it is four business days prior to the holder-of-record date. If the stock sale is made prior to the ex-dividend date, then the dividend is paid to the buyer; if the stock is bought on or after the ex-dividend date, the dividend is paid to the seller.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Ex-dividend date. The date when the right to the dividend leaves the stock. This date was established by stockbrokers to avoid confusion, and it is four business days prior to the holder-of-record date. If the stock sale is made prior to the ex-dividend date, then the dividend is paid to the buyer; if the stock is bought on or after the ex-dividend date, the dividend is paid to the seller.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
