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Cum Dividend

Cum dividend refers to a stock that is trading with the right to receive the upcoming dividend payment. Investors who purchase shares of a cum dividend stock before the ex-dividend date are entitled to the declared dividend. Once the stock passes the ex-dividend date, it trades “ex-dividend,” meaning new buyers will not receive the next dividend payment.

Example

An investor buys shares of a company before the ex-dividend date, meaning the stock is cum dividend, and the investor will receive the upcoming dividend payment.

Key points

• Cum dividend means the stock is trading with the right to receive the next dividend payment.

• Investors must purchase cum dividend shares before the ex-dividend date to receive the dividend.

• Once the ex-dividend date passes, the stock trades without the right to the upcoming dividend.

Quick Answers to Curious Questions

It means that the stock is trading with the right to receive the next dividend payment, and buyers of the stock before the ex-dividend date will receive the dividend.

A stock stops trading cum dividend after the ex-dividend date, at which point it trades “ex-dividend,” and new buyers are no longer entitled to the upcoming dividend.

The ex-dividend date determines whether a buyer will receive the next dividend payment. Buyers who purchase the stock on or after the ex-dividend date will not receive the dividend.