Ex-dividend date

The first day a share trades without the right to a declared dividend, so the price typically falls by about the dividend. Set by the settlement cycle, it is the date a buyer must beat, not the record date.

Where you will meet it

Ex-dividend date appears in 2 learning outcomes on the CFA syllabus. A few of them:

• Set out dividends, buybacks, reverse splits as well as ordinary stock splits, and the sequence of dates for a dividend
  CFA Level I · Equity Investments

  “A dividend passes through four dates: declaration, when the board announces it; the ex-dividend date, from which buyers no longer receive it and the price typically falls by about the dividend; the record date, when the register of holders is fixed; and payment.”

• Explain the expected impact on shareholder wealth and on a company's financial ratios of cash dividends (regular, extra or liquidating), stock dividends, reverse stock splits and stock splits
  CFA Level II · Corporate Finance

  “In a frictionless market no payout changes shareholder wealth: a cash dividend moves value from the company to the holder, and the share price drops by about the dividend on the ex-date.”

See also

Record date

Practise it

• Today's practice question One question, with every wrong option explained.
• Free Level I diagnostic test Twelve questions that show which topics to start with.
• Free finance calculators Check your arithmetic on the exam's core formulas.

All terms beginning with E · Glossary