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I was just curious when does a share switch from being an Ex Div to a Cum Div?
Is it 6 months after dividend is paid or is it always ex div until the very end before next dividend is paid?
thanks
FredrikThere is no fixed rule, but in practice is usually several weeks before the payment of the dividend. The reason is simply that the company will pay the dividend to the shareholders that they have in their records and they won’t have had time to change the details for people who bought/sold shares during the few weeks before the dividend is actually paid.
(The switch is from cum div to ex div – people buying the shares in the few weeks before the payment of the dividend will not get the dividend (it will go to the previous owner instead) and so the price becomes ex div). Immediately after the dividend is paid the share becomes cum div because the new owner will be getting the next dividend.
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