Exdividendo

Exdividendo refers to the date on which a stock begins trading without the value of its most recently declared dividend. This means that any investor who buys the stock on or after the ex-dividend date will not be entitled to receive the upcoming dividend payment. The dividend payment will instead go to the shareholder who owned the stock before the ex-dividend date.

The ex-dividend date is crucial for determining dividend eligibility. It is typically set one business day before the record date. The record date is the date on which a company's shareholders must be registered on their books to receive a declared dividend. Therefore, to receive the dividend, an investor must purchase the stock and have it settled in their account by the close of trading on the day before the ex-dividend date.

When a stock trades ex-dividend, its price is expected to drop by approximately the amount of the dividend per share. This price adjustment reflects the fact that the company is distributing cash to shareholders, thus reducing the company's overall value by that amount. While the stock price may fluctuate for other reasons, the ex-dividend date serves as a predictable point for this price adjustment related to the dividend.

Understanding the ex-dividend date is important for investors, particularly those who are focused on income generation through dividends. It helps them plan their trades to ensure they capture dividend payments if that is part of their investment strategy.