(Latin: without) A prefix used to exclude specified benefits when a security is quoted. A share is described as ex-dividend (xd or ex-div) when a potential purchaser will no longer be entitled to receive the company's current dividend, the right to which remains with the vendor. Government stocks go ex-dividend 36 days before the interest payment. Similarly, ex-rights, ex-scrip, ex-coupon, ex-capitalization (ex-cap), and ex-bonus mean that each of these benefits belongs to the vendor rather than the buyer. Ex-all means that all benefits belong to the vendor. Cum- (Latin: with) has exactly the opposite sense, meaning that the dividend or other benefits belong to the buyer rather than the seller. The price of a share that has gone ex-dividend will usually fall by the amount of the dividend, while one that is cum-dividend will usually rise by this amount. However, in practice market forces usually mean that these falls and rises are often slightly less than expected.

Accounting dictionary. 2014.

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.