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Ex-Dividend Dates: When Are You Entitled to Stock and Cash Dividends

Ex-Dividend Dates:
When Are You Entitled to Dividends

To determine whether you should get a dividend, you need to look at two important dates. They are the "record date" or "date of record" and the "ex-dividend date" or "ex-date."

When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.

Once the company sets the record date, the ex-dividend date is set based on stock exchange rules. The ex-dividend date is usually set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

Here is an example:

Declaration Date

Ex-Dividend Date

Record Date

Payable Date

Friday, 7/26/2013

Thursday, 8/8/2013

Monday, 8/12/2013

Tuesday, 9/10/2013

On July 26, 2013, Company XYZ declares a dividend payable on September 8, 2013 to its shareholders. XYZ also announces that shareholders of record on the company's books on or before August 12, 2013 are entitled to the dividend. The stock would then go ex-dividend two business days before the record date.

In this example, the record date falls on a Monday. Excluding weekends and holidays, the ex-dividend is set two business days before the record date or the opening of the market—in this case on the preceding Thursday. This means anyone who bought the stock on Thursday or after would not get the dividend. At the same time, those who purchase before the ex-dividend date on Thursday will receive the dividend.

With a significant dividend, the price of a stock may fall by that amount after the ex-dividend date.

If the dividend is 25% or more of the stock value, special rules apply to the determination of the ex-dividend date.  In these cases, the ex-dividend date will be deferred until one business day after the dividend is paid.  In the above example, the ex-dividend date for a stock that’s paying a dividend equal to 25% or more of its value, is September 11, 2013.

Sometimes a company pays a dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company or in a subsidiary being spun off. The procedures for stock dividends may be different from cash dividends. The ex-dividend date is set the first business day after the stock dividend is paid (and is also after the record date).

If you sell your stock before the ex-dividend date, you also are selling away your right to the stock dividend. Your sale includes an obligation to deliver any shares acquired as a result of the dividend to the buyer of your shares, since the seller will receive an I.O.U. or "due bill" from his or her broker for the additional shares. Thus, it is important to remember that the day you can sell your shares without being obligated to deliver the additional shares is not the first business day after the record date, but usually is the first business day after the stock dividend is paid.

If you have questions about specific dividends, you should consult with your financial advisor.


The Office of Investor Education and Advocacy has provided this information as a service to investors.  It is neither a legal interpretation nor a statement of SEC policy.  If you have questions conce