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Thus the key date for a stock purchase is the ex-dividend date: a purchase on that date (or after) will be ex (outside, without right to) the dividend. If, for whatever reason, a share transfer prior to the ex-dividend date is not recorded on the register in time, the seller is obligated to repay the dividend to the buyer when he receives it.
The ex-dividend date, i.e. the first date in which a new buyer of shares would not be entitled to the dividend, is the business day prior to the record date (see ex-dividend date for exceptions). In the case of a special dividend of 25% or more, however, special rules that are quite different apply.
Dividend stripping is the practice of buying shares a short period before a dividend is declared, called cum-dividend, and then selling them when they go ex-dividend, when the previous owner is entitled to the dividend. On the day the company trades ex-dividend, theoretically the share price drops by the amount of the dividend.
This text is maintained by the U.S. Gov't Printing Office, but must be checked for revisions or amendments after its effective date.) USCA — United States Code Annotated; USCCAN — United States Code Congressional and Administrative News; USCS — United States Code Service
For instance, on the day before an ex-dividend date, it may make sense to exercise an equity call option early in order to collect the dividend. In general, equity call options should only be exercised early on the day before an ex-dividend date , and then only for deep in-the-money options.
Theoretical ex-rights price (TERP) is a situation where the stock and the right attached to the stock is separated. TERP is a calculated price for a company's stock shares after issuing new rights-shares, assuming that all these newly issued shares are taken up by the existing shareholders. The consequence would be that the price will be lower ...
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An ex officio member is a member of a body (notably a board, committee, or council) who is part of it by virtue of holding another office. The term ex officio is Latin , meaning literally 'from the office', and the sense intended is 'by right of office'; its use dates back to the Roman Republic .