What is Cum-Dividend and Ex-Dividend

When a company is about to announce the dividend for their company’s share holders, Cum-Dividend And Ex-Dividend are then announced.

Let’s assume that Company A has announced Cum-Dividend And Ex-Dividend dates.

Cum-Dividend:

This is a time period in which, if a person buy shares of the Company A, then he/she will get the latest dividend. The Cum-Dividend is a time period like: five or so days.

Ex-Dividend:

This is the time period in which, if a person buy shares of the Company A, then he/she will not be eligible to get the latest dividend on shares.

If shares are bought in this time period, then the previous buyer will get the benefits [that is: the dividend].

What is the use or purpose of Ex-Dividend or Ex-Date?

Buyers who bought shares of the company in the Cum-Dividend time period, if they want to sell the shares and if they still want to get the Company A’s dividend: then in the Ex-Dividend time period, buyers can sell the shares and they will still get the dividend.