Listen to a Business English Dialogue About Ex stock dividend
Emily: Hi Danielle, have you heard about ex-stock dividends?
Danielle: Hi Emily. Yes, ex-stock dividends are dividends paid to shareholders, but they don’t affect the stock’s price because they’re paid after the stock’s ex-dividend date.
Emily: Right. So, shareholders who buy the stock on or after the ex-dividend date won’t receive the upcoming dividend payment?
Danielle: Exactly. The stock’s price typically adjusts downward on the ex-dividend date by an amount equal to the dividend to account for the fact that new buyers won’t receive the dividend.
Emily: How do ex-stock dividends impact investors’ decisions?
Danielle: Well, Emily, some investors might buy shares just before the ex-dividend date to receive the dividend, while others might avoid buying right before to avoid the price drop after the dividend is paid.
Emily: Do companies announce ex-stock dividends in advance?
Danielle: Yes, Emily. Companies usually announce ex-dividend dates along with dividend amounts in advance, allowing investors to plan their investments accordingly.
Emily: What happens if an investor sells shares on or after the ex-dividend date?
Danielle: If an investor sells shares on or after the ex-dividend date, they’ll still receive the dividend payment if they owned the shares before the ex-dividend date.
Emily: Thanks for clarifying, Danielle. I have a better understanding of ex-stock dividends now.
Danielle: No problem, Emily. If you have any more questions about dividends or investing, feel free to ask anytime.