Saturday, September 20, 2008
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. |
posted by hearthy at 8:00 PM
