Beginners Guide - Why do Stocks Drop After Ex-Dividend in NEW TO TRADING & INVESTMENTS? - A stock trades ex-dividend on or after the ex-dividend date (ex-date). At this point, the person who owns the security ...
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09-06-2011 01:02 PM
Why do Stocks Drop After Ex-Dividend
A stock trades ex-dividend on or after the ex-dividend date (ex-date). At this point, the person who owns the security on the ex-dividend date will be awarded the dividend payment, regardless of who currently holds the stock. After the ex-date has been declared, the stock will usually drop in price by the amount of the expected dividend.
For example, if Titan declares ex-dividend date on Sep 20th 2011. All those who hold the stock on Sep 20th 2011 will get the dividend payment. And if the dividend is 2% yields, the stock normally drops by 2% after the ex-dividend date although not necessary
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