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Ex-Dividend Date
Definition
The first trading day a stock trades without the right to its declared dividend. Buyers on or after this date do not receive the dividend. Stocks typically drop by the dividend amount on the ex-date, which short sellers must compensate lenders for.
Related Terms
Manufactured Dividend
A cash payment a short seller makes to the share lender to compensate for dividends paid during the loan period. ATO rules govern the tax treatment, and the obligation often spikes around the ex-dividend date.
Dividend
A cash distribution from a company to shareholders, usually paid semi-annually for ASX stocks. Most ASX dividends carry franking credits.
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