Public limited companies decide on the amount of the dividend on the day of the Annual General Meeting. Shareholders who have the share in their securities account at the close of trading receive the dividend on the next trading day (or until the third day after the Annual General Meeting) the dividend was paid out. On Day after the Annual General Meeting the share opens trading lower than the previous day. This phenomenon is known as "Ex-dividend" respectively "Ex-Tag" known.
What does ex dividend mean?
"Ex Dividend", or abbreviated "exDiv" or "exD" means as much as "without dividend". Since the dividend is distributed as part of the profit, the value of the share decreases by the corresponding amount.
The ex-dividend day
The Ex-dividend day - short: ex-tag - is in Germany the first day after the annual general meeting. On this day, the share is traded with the addition "ex dividend" and the share is traded at a discount in the amount of the gross dividend (dividend discount).
This creates a downward gap in the share chart. It can often be seen that the dividend discount is quickly recovered in the following days, which sometimes also has psychological reasons, as the share appears relatively cheap due to the dividend discount.
In the USA, the ex-dividend date is usually two to three weeks before the "pay date" on which the distribution is made. (See also: Record Date)
