Are dividends between the declaration date of the dividend payment and the dividend pay date sold cum dividend or ex dividend?

Are dividends between the declaration date of the dividend payment and the dividend pay date sold cum dividend or ex dividend?

• A. Ex dividend
• B. Cum dividend
• C. Interim dividend
• D. Special dividend

Answer: (A)

Dividends are characterized by cum-dividend up to the ex-dividend date, after which shares trade ex-dividend. The ex-dividend date is the point from which a new buyer no longer has the right to the declared dividend; the right remains with the seller who held the shares before that date. Since the pay date occurs after the ex-dividend date, any sale taking place after that date is ex-dividend, meaning the buyer does not receive the upcoming dividend. So, the dividends sold in the period between the declaration and the pay date are ex-dividend.

Dividends are characterized by cum-dividend up to the ex-dividend date, after which shares trade ex-dividend. The ex-dividend date is the point from which a new buyer no longer has the right to the declared dividend; the right remains with the seller who held the shares before that date. Since the pay date occurs after the ex-dividend date, any sale taking place after that date is ex-dividend, meaning the buyer does not receive the upcoming dividend. So, the dividends sold in the period between the declaration and the pay date are ex-dividend.