7

For example, if the ex-dividend date is next Monday, and I buy the stock on next Monday, would I get the dividend? Or would the person who sold the stock to me get the dividend?

  • ...and would it depend on what time of the day the stock purchase occurred as compared to what time of the day the dividend was declared? – Dilip Sarwate Dec 15 '12 at 12:26
  • Time of day would make the process awful, imagine the folk using a live broker, and waiting on hold. – JoeTaxpayer Dec 15 '12 at 14:52
9

Here is the definition of Ex-dividend date from the SEC:

Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. 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.

The linked document discusses weekend, and holidays involved in the calculation.

The difference between the record date and the ex-dividend is to allow for the three days of settlement.

  • 2
    +1 ex-dividend can be confusing at first, but if you think about it the name makes sense. The ex-div date is the first date on which the stock is bought/sold "ex[cluding]"-dividend. – thepassiveinvestor Dec 17 '12 at 5:36

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