CAN YOU GIVE ME AN EXAMPLE OF THE EX DIVIDEND DATE AND HOW ITAFFECTS - ProProfs Discuss
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Can you give me an example of the ex dividend date and how itaffects who gets a dividend?



Asked by Grayson, Last updated: Oct 25, 2021

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John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

Lets say the dividend has been declared and will be payable on june 1, 2005 toanyone who is recognized as a shareholder on friday may 13, 2005. in order for you tobe recognized as a shareholder on may 13, 2005, you must hold the stock on tuesdaymay 10.remember that stock transactions settle three business days later. if you sold thestock on tuesday may 10, you would not be recognized as an owner on friday may13, because your transaction would settle on that day and the buyer of your stockwould be recognized as the owner by the issuer. if you sold the stock on wednesdaymay 11, the transaction would not settle until monday may 16 so you would still berecognized as a shareholder of record on the 13th.the person who held the stock and didnt sell until may 11th would receive a dividendon june 1, 2005. the person who sold the stock before or on may 10th would notreceive a dividend from the issuer.so if your brother bought the stock on february 1st, and you bought the stock on may1st and both of you held the stock at least until may 11, 2005, you would each receivethe declared dividend per share.if a company declares a dividend of $1.50 per share, and you and your brother ownedthe exact same number of shares, you would each receive the exact same amount ofdividends from the company. if you wanted to, you could sell all your shares on may11th, 2005 but you will still be recognized as an owner on friday may 13th, whichmeans you will still receive the dividend.
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