Accounting Dictionary


Ex-dividend refers to recently purchased stock that will not receive the next dividend payment.

Black company has declared a $2 a share dividend to be paid on December 15th to shareholders of record on December 1st. This means that on December 1st the secretary will start typing up the dividend checks and put them in the mail on December 15th. Whoever owns the stock on December 1st will receive the dividend. If someone purchased stock between December 1 and December 15th, the new owner would not receive the dividend. We say that he has purchased the stock ex-dividend.

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