Ex-dividend (XD), or without dividend, has nothing to do with ex-bosses or ex-girlfriends.
XD refers to a key date related to dividend payments. Take note of this date when buying a stock for which dividends have been declared: You're entitled to the last declared dividend only if you own the stock before this date.
Until a stock goes XD, it trades cum-dividend (CD), or with dividend, so buyers get any declared dividends that have not been paid yet.
When you see CD next to a stock's name on the Singapore Exchange (SGX) website, this tells you the firm will be paying out dividends in the near future, and it's your pre-empt notice.
Take FJ Benjamin, which went CD after the retailer announced a 1.1-cent dividend to be paid on Dec 5.
Why is it so important
Let's continue with the earlier example. FJ Benjamin's XD is Nov 13.
This means if you own the stock on or before Nov 12, you would get the 1.1-cent dividend as the stock would be trading CD then.
If you own the stock on Nov13 or after, you would not be entitled to the dividend.
Investors who sell their shares on or after the XD or ex-dividend retain their rights to the dividends.
Another thing to note is that stocks usually suffer a drop in price once they go XD - typically by an amount equivalent to the dividend payout.
In FJ Benjamin's case, chances are the value of one share of its stock will fall by about 1.1 cents when the stock goes XD.
A stock might see an even sharper drop if the firm chooses to dish out a larger dividend.
So you want to use the term. Just say...
'If you're looking for a bonus, don't buy this stock now because it's at its ex-dividend date. Better wait for another time.''
