Suppose, a Company announces a “Record Date” of “11th January 2025”, then the “Ex-Date” will be “10th January 2025”, right?
And if I buy a Stock on “10th January 2025”, anytime before the Market closes, the shares of that Stock will get deposited in my Demat Account by the end of “11th January 2025”, as the settlement Cycle is T+1. Therefore, I would be eligible for Dividents, right?
Taking the above example forward, when the shares start trading at the “Ex-Divident Price”?
It should start Trading at the “Ex-Divident Price” only after the Record Date, right? Please explain this question.
Yes, yu must purchase the stock on or before 10th Jan (Pre-Ex date). The stock will trade with the corporate action benefits until 10th and from 11th Jan, it will trade ex-benefit.
Let’s say, the price of the stock is 500 on 10th Jan and the dividend announced is 10 rupees. The following day on 11th Jan, the stock will trade around 490, reflecting the dividend adjustment.
Please see whether I am Defining the terms rightly. If not, please convey the Right Definition.
'Record Date": The date by which a person should have the shares of the company in their Demat Account to avail Divident Benefits.
“Ex-Date”: The last date you can buy the Shares of a Company, so that the shares get credited to your Demat Account by the “Record Date” to avail Divident Benefits.
Therefore, the Ex-Date should be one day before the Record Date because of T+1 cycle, i.e. 10th January 2025
If the cycle is T+2, the Ex-Date would be 2 days before the Record Date i.e. 9th January 2025.
Continuing with the above example,
Since, the Record Date is “11th January 2025”, and I have to have the Shares of the Company in my Demat Account by “11th January 2025”, therefore, the last date at which I can buy the shares of the Company would be “10th January 2025” (Ex-Date).
One more question,
What will be the Ex-Date if the settlement Cycle was let’s say T+3?