<p>When a firm announces a dividend, it pledges to pay a given amount at a given date (<span class="math-container">$t_p$</span>) to its stock holders. As traded shares may change hands frequently, the firm defines who has the right to claim the dividend as the shares owners at a given date (<span class="math-container">$t_e$</span>), that usually is some date between the announcement date and the payment date. During the <span class="math-container">$t_e$</span> to <span class="math-container">$t_p$</span> period, the stock can trade, but its buyers won't have the right to receive the dividend, even though it hasn't been paid yet. This is why we say ex-dividend, because the share has no longer attached the right to claim the next dividend.</p>

CC BY-SA 4.0
2018-12-29T09:00:40.323Z
2018-12-29T09:00:40.323Z
Patricio
<p>I am reading some lecture notes on asset pricing, and they use the term "ex-dividend" price of an asset.
I googled and found that ex-dividend means the time between announcement and payment of a dividend.</p>

<p>So, what does it mean by ex-dividend price? What does the word 'ex-" refer to?</p>

<p>Thank for your help in advance!</p>

<asset-pricing>
Ex-dividend (Asset Pricing)
bluesky23
# Ex-dividend (Asset Pricing)

(Asked by: username_0 on 2018-12-28)

I am reading some lecture notes on asset pricing, and they use the term "ex-dividend" price of an asset.
I googled and found that ex-dividend means the time between announcement and payment of a dividend.

So, what does it mean by ex-dividend price? What does the word 'ex-" refer to?

Thank for your help in advance!

**Tags:** asset-pricing


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## 1 answers

### Answer by username_1 on 2018-12-29. Score: 2 | Accepted answer

When a firm announces a dividend, it pledges to pay a given amount at a given date ($t\_p$) to its stock holders. As traded shares may change hands frequently, the firm defines who has the right to claim the dividend as the shares owners at a given date ($t\_e$), that usually is some date between the announcement date and the payment date. During the $t\_e$ to $t\_p$ period, the stock can trade, but its buyers won't have the right to receive the dividend, even though it hasn't been paid yet. This is why we say ex-dividend, because the share has no longer attached the right to claim the next dividend.


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