The Ex-Dividend
Abbreviated x or xd, ex-dividend really means without dividend. When a stock is in an ex-dividend
period, it means that a buyer is not entitled to receive the next dividend payment given by the
company. A dividend-issuing company tallies its shareowners on the so-called record date;
therefore, the transfer of ownership that occurs when a stock is purchased must be done by the record
date for the new owner to receive the next dividend. The NYSE and the NASDAQ, among others,
require that the buyer in every transaction be recorded with the issuing corporation by the third
business day following a trade. Therefore, the ex-dividend period on exchanges that honor the "T
plus 3" rule is two days. During those two days, the transfer of ownership of the stock will not be
completed until the business day after the date of record.
| Any Month |
Date |
Calendar Day |
Status |
|
3 |
Monday |
With/Dividend |
|
4 |
Tuesday |
Ex-Dividend |
|
5 |
Wednesday |
" " |
|
6 |
Thursday |
" " |
|
7 |
Friday |
" " |
|
8 |
Saturday |
Not a business day |
|
9 |
Sunday |
Not a business day |
|
10 |
Monday |
Record Date/Business Day |
|
11 |
Tuesday |
Business Day |
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