When to buy ex-dividend?
The ex-dividend date is when the stock begins trading without the subsequent dividend value. Investors who purchase stock before the ex-dividend date are entitled to the next dividend payment, while those who purchase stock on or after the ex-dividend date are not. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.Here’s how they work: To be eligible to receive a dividend declared for a stock, you must buy the stock, or already own it, before the ex-dividend date (otherwise known as the ex-date). The purchase cutoff time is one business day before the ex-date.With a significant dividend, the price of a stock may fall by that amount on the ex-dividend date. If the dividend is 25% or more of the stock value, special rules apply to the determination of the ex-dividend date. In these cases, the ex-dividend date will be deferred until one business day after the dividend is paid.
Do share prices fall after the ex-dividend date?
After the share goes ex-dividend, the price will usually drop to reflect the amount of money leaving the company’s books, all else being equal. The dividend per share would simply be the total dividend divided by the shares outstanding.