What is ex-dividend date
Ex dividend: what is it?
Those who own a share of the respective company decide on the day of the general meeting how high the dividend will be. This is done at the suggestion of the board. In practically all cases, this proposal is accepted by the shareholders.
A dividend is that part of the profit that a stock corporation pays to its shareholders or a cooperative to its members.
More on this: What exactly is a dividend?
The dividend payments will then be made one trading day later. The shareholders will receive a corresponding credit on their account. Since the shareholder receives the dividend, the value of the share decreases accordingly.
Thus, the share price is usually reduced by the dividend payment. You can intuitively imagine it like this: the stock corporation pays out a certain sum of money from its assets, so the value of the company decreases accordingly. Often this dividend discount is then quickly made up in the price.
Ex dividend means that on this day a price reduction was made in the amount of the dividend determined by the general meeting.
Ex dividend: what abbreviations are there?
The price is finally given the addition “ex dividend” or the abbreviation “exD” or “exDiv”.
One can freely translate this as “no dividend”.
Such a price suffix is understood to be an abbreviation or an abbreviation that is attached to a stock exchange price and allows further conclusions to be drawn about the price formation.
As of this day, the share will be traded with no dividend entitlement for the past financial year, as the dividend previously included in the price was rejected.
In the case of a lot of course information, however, this addition is simply omitted in the current course.
Therefore, the shareholder should know the date of the general meeting so that he is able to correctly assess the price minus and irritations can be avoided.
Ex dividend: What effects does this have on the DAX?
Even if many DAX companies pay dividends on one day, this cannot pull the DAX down.
The reason: The stock market barometer is a so-called performance index and not a price index.
The German share index DAX is calculated both as a performance index and as a price index, but the latter is hardly noticed by the public. The Dax 30 index seen in the press always refers to the performance index. With this variant, the actual investment success of an investor is measured more precisely.
Dividend and performance index
In addition to the price, a performance index also includes all dividends and other payments to shareholders.
A performance index thus shows the overall performance that a shareholder makes with the shares in this index.
It is assumed that in the case of the performance index, all cash dividends and other income from owning the shares are reinvested in the same shares in the index.
So if a distribution is made to investors, the share price is usually reduced by the amount of the dividend. The payments are immediately added back to the rate for the ongoing index calculation.
More on this: What influence does the dividend have on the price development
Dividend and price index
In the case of a price index, however, the index level is determined exclusively on the basis of current share prices. Dividend payments or changes in capital are therefore not included.
In the event of a distribution to investors, there is therefore a corresponding devaluation. Many stock indices are price indices and therefore do not take into account dividend distributions.
These indices include the Dow Jones, Nikkei 225, FTSE 100 and CAC 40.
More on this: Making Money With Dividends: How To Properly Do It
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