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Discussion in 'Stocks' started by Darshan, Mar 31, 2010.

1. ### Darshan

This is a really novice question....

In order to get the dividend you must be long the stock by 7:00pm (CST) the day before ex-div. Then on the dividend day you receive the dividend at the close of that day? Correct?

So what if I'm long a stong for ex-dividend day but sell prior to dividend day, I don't get the dividend right?

So, I'm looking at yahoo finance and it tell me the Annual Dividend is say 5%.

So a \$100 stock would pay \$5 in dividends every year?

Dividends are paid out every month, correct?

So would each dividend payment = 5/12 = .41/share?

What does the price action of a stock look like prior to ex-div? Post ex-div?

Is there any correlation? The .41 cent dividend is reflected in the price? Does the price adjust after ex-dividend?

It's amazing I have gone this far in my trading career and not know much about dividends.

Any and all input would be much appreciated. Thank you!

John

2. ### Free Thinker

In order to get the dividend you must be long the stock by 7:00pm (CST) the day before ex-div. Then on the dividend day you receive the dividend at the close of that day? Correct?
no. on ex dividend day the stock starts trading less the dividend.the stock price is reduced the same amount as the dividend. you will recieve the dividend on payment day sometime in the future.

So what if I'm long a stong for ex-dividend day but sell prior to dividend day, I don't get the dividend right? no you dont.

So, I'm looking at yahoo finance and it tell me the Annual Dividend is say 5%.

So a \$100 stock would pay \$5 in dividends every year?yes

Dividends are paid out every month, correct?some are monthly most are quarterly.

So would each dividend payment = 5/12 = .41/share?

What does the price action of a stock look like prior to ex-div? Post ex-div? depends

Is there any correlation? The .41 cent dividend is reflected in the price? Does the price adjust after ex-dividend? yes

3. ### Darshan

I truly appreciate it! Thanks free thinker.

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