What Is an Ex-Dividend?

In issuing dividends or dividends, stock issuing companies need to perform a variety of preparations such as checking the register of shareholders and convening a shareholder meeting. Therefore, it is stipulated that the list of registered shareholders on a certain day shall prevail, and an announcement will be made to suspend the shareholder transfer period after this date . During the closing period, dividends are still paid to the old shareholders who are on the register. Holders of newly purchased stocks cannot enjoy the right to receive dividends without a transfer. This is called ex-dividend. At the same time, the stock purchase price should be deducted from the dividend payout during this period. This is the ex-dividend transaction.

Ex-dividend

Stock issue companies are issuing

Ex-right and Ex-dividend

When the listed company announced the dividend for the previous year

Ex-Dividend Date

Date that determines whether a stockholder is entitled to a dlidend payment; Anyone holding stock immediately before this date is entitled to a dlidend.

This indicates shares that have been bought without the right to receive the dlidend, ie the seller retains the dlidend.

Issuer is

Ex-dividend period

The long market refers to the stock market where the stock price has maintained a rising momentum for a long time. The main characteristic of its stock price change is a series of fluctuations. In order to invest correctly in the ex-dividend period of the long market, we must first research and judge the "ex-dividend period" of the long market.

1. The stock price of dividend-optimized stocks is rising as the ex-dividend trading day approaches, which fully reflects the "time reward" of dividend income.

2. Ex-dividend stocks can often fill interest quickly, and some dividend-interest stocks can not only "completely fill interest", but also exceed the price before ex-dividend.

3 According to the difference in stock prices, there is an upward ratio trend, and the multiples of the ratio of interest to profit that investors agree on are getting higher and higher.

feature

According to the characteristics of the above-mentioned "ex-dividend market" analysis, we can draw the following characteristics of the long market:

1. The time value of dividends is valued. That is, the shorter the time it takes to receive a dividend, the more valuable its stock becomes. Therefore, reflected in the stock price, there is a gradually rising trend.

2. Stocks can be filled quickly after ex-dividend. Therefore, investors are willing to transfer and receive dividends, and their willingness to hold shares for a long time is also high.

3 At the beginning of the market, stocks with good performance, high dividends, and low multiples of dividends were driven upward. Then, the stocks with lower prices but with dividends adjusted their prices. Finally, it was the turn of interest-based stocks to sprint.

4 The stock market rose wave after wave, jumping from one leg to the next, and the signs of rotation were obvious. Choosing the right stocks can make a lot of money by constantly changing hands, and holding stocks will also make a profit, so investors are generally reluctant to withdraw funds from the stock market.

5. As the ratio of interest to equity was low in the early stages, a large number of investors were attracted into the market. As the stock price continued to rise, the ratio of interest to equity became higher and higher.

Mastering this changing characteristic of the "ex-dividend period" of the long market, it is not self-evident how investors will operate.

Processing skills

After a joint stock company operates for a period of time (usually one year), if the operation is normal and profits are generated, dividends and dividends must be distributed to shareholders. There are generally three delivery methods: one is paid to shareholders in the form of cash. This is the most common and common form. The second is to distribute shares to shareholders. This method is mainly used to keep funds in the company and expand operations, in order to pursue the long-term interests and long-term goals of the company's development. The third form is the distribution in kind, that is, the company's products are distributed to shareholders as dividends and dividends.

4 dates

On the eve of the dividend payout, shareholders holding stocks must pay close attention to the 4 dates related to the dividend payout. These 4 dates are:

1. Dividend declaration date, that is, the time when the company's board of directors will announce the news of dividends and dividends.

2. The dividend payout date, that is, the date on which dividends are formally distributed to shareholders.

3. Equity registration date, that is, the date of counting and acknowledging the shareholders participating in the distribution of dividends.

4. The ex-dividend date, that is, the date on which the dividend is no longer enjoyed.

Ex-dividend stock

The dividend distribution of listed companies, especially long-term stable cash dividends, is an important indicator of the investment value of listed companies. With the continuous improvement of the market and the maturity of investor value investment concepts, dividends and dividends are increasingly valued by all parties in the securities market. All market participants basically hold the same positive opinions on promoting the dividends of listed companies, but a few investors and market participants have raised objections to the ex-rights and ex-dividend reference prices announced by the stock exchange on the ex-dividend date. They believe that on the dividend and ex-dividend dates, the total market value of investors' holdings often "shrinks", that is, the phenomenon of "discounted rights" and "discounted interest". The ex-dividend and ex-dividend reference prices announced by the stock exchange before the opening date of the ex-dividend date are incentives for the stock price to fall. Therefore, it is recommended that the stock exchanges do not perform the ex-dividend process on the share prices of cash dividend companies. Otherwise, the more listed companies are allocated, the greater the investor losses, and even the correctness of encouraging listed companies' dividend policies is questioned. This research report is based on theories and international practices, and analyzes the misunderstandings caused by this kind of viewpoint in order to deepen investors' correct understanding of the above issues.

Registration date

Of these four dates, the equity registration date and ex-dividend date are particularly important. As countless investors buy or sell on the stock market every day, the company's stock is constantly changing hands. This means that shareholders are constantly changing. Therefore, when the company's board of directors decides to distribute dividends, it must clearly announce the equity registration date, and the dividend distribution is based on the company register on the date of the equity registration date. Any investor recorded on the shareholder register on this day shall be recognized by the company as a shareholder and entitled to the dividends and bonuses distributed this period. If the stockholder has not registered before the equity registration date, the name of the stock seller remains on the register of shareholders, so that the company still recognizes it as a shareholder, and its dividend will still be distributed to the stock seller instead of Holder. It can be seen that dividends are not necessarily obtained by purchasing stocks, and normal dividend income can only be obtained by registering with the registration company before the equity registration date.

Ex-dividend date

As for the determination of the ex-dividend date, it is also important for investors, because the stocks purchased by investors after the ex-dividend date are no longer entitled to participate in the dividend distribution of this period. Therefore, the price on the ex-dividend date will change from the stock price before the ex-dividend date. Generally speaking, the stock market quote on the ex-dividend date is the ex-dividend reference price, which is the closing price on the day before the ex-dividend date minus the dividend per share. For example, a certain stock plan will pay a dividend of 2 yuan. If the price before the ex-dividend date is 11 yuan per share, the reference price on the ex-dividend day should be 9 yuan (11-2 yuan). Mastering this pattern of stock price changes before and after the ex-dividend date will help investors to fill in the appropriate commission price when buying, so as to effectively reduce their share purchase costs and reduce unnecessary losses.

For investors with medium and long-term investment plans, they can also buy and transfer stocks to enjoy dividend income when the stock price on the eve of ex-dividend is low. There are some reasons why the price is weak on the eve of ex-dividend, mainly when there are more investors. Because short-term investors generally prefer not to hold accounts and do not receive interest rates, they try to sell their stocks on the eve of ex-dividends, even at lower prices. Therefore, people with medium and long-term investment plans can buy some relatively cheap stocks and obtain dividend income if they enter the market while short-term investors retreat. As for the specific time to buy on the eve of ex-dividend, it is a very complicated technical issue. Generally speaking, at the time of closing the transfer, when the market is not clear, there are more short-term investors, so before the closing of the transfer, those short-term customers who do not want to transfer, have to sell all the shares, the closer the transfer period, The more short-term customers come out, so in principle, you can buy stocks at relatively appropriate prices within 1-2 days of closing the customer, but this situation must not be absolute. Because if everyone is optimistic about a certain stock, or the dividend of a certain stock is very attractive, the phenomenon of "grabbing interest" may also occur. That is, the closer the transfer period is, the more investors buy the stock, and therefore the greater the rise in the stock price. Investors must analyze the specific situation in order to properly grasp the buying and selling opportunities during the dividend payout period.

Ex-right

The removal of rights is due to the increase in the company's share capital and the actual value of the enterprise represented by each share of stock (net assets per share) has decreased. This fact must be eliminated from the stock market price after this fact occurs, resulting in the elimination behavior.

Listed companies use stock dividends to distribute to shareholders, that is, when the company's surplus is converted into capital increase, or when allotment is performed, it is necessary to divide the stock price. If a listed company distributes its surplus to shareholders in cash, the stock price will be ex-dividend. ;

The ex-rights or ex-dividends occur because the investor bought the same company's stock before the ex-rights or ex-dividend date and the same day's purchaser, but the inherent rights are different, which is obviously quite unfair. Therefore, the stock price must be adjusted downwards on the ex-dividend or ex-dividend date to become the ex-dividend or ex-dividend reference price.