Difference between Ex dividend and Cum Dividend

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Bhavyesh asked over 3 years ago

What is the difference between Ex dividend and Cum Dividend? Please provide suitable example

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 3 years ago

> Ex dividend > Cum Dividend --When a share is said to be 'cum dividend', it means that it is offered for sale with an entitlement to the next dividend payment attached. This dividend will already have been declared (but not paid) by the company, so the market knows how much it is worth and the share price will reflect this. -- At some point shortly before payment of the dividend is actually due, the share will go 'ex dividend', meaning that it is being offered for sale without the dividend. If the current owner sells an 'ex div' share, he will keep the dividend payment. But again, the price of the share will reflect this - it will have dropped from its 'cum dividend' price --Cum dividend means "with dividend." A stock trades cum-dividend up until the ex-dividend date . On or after this point, the stock trades without its dividend rights. --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 payment, regardless of who currently holds the stock.

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