XD is a non-literary term used to specify the ex dividend date in conversational basis. Ex dividend date is the day till which the stock has to be in the investor’s depository account for them to eligible for the current dividend issue.
Whenever a dividend is announced, from the declaration date the stock price heads north until the ex dividend date, it is when the stocks are sold. The stock price starts to dip after or on the ex dividend date due to extensive selling. The temporary stock price hike is due to the short term traders who exploit the opportunity of gaining dividend returns.
If investors sell on XD, then the existence of record date is questionable. Record date falls exactly after the ex dividend date. Since stocks take a day of delay to settle, until the record date, the sellers are entitled for dividend issue.
How dividend is paid?
Dividends will be credited directly to the bank account linked to your demat account. The broker does nothing in case of cash dividends, in the event of delayed dividends they can direct us on how to approach the management.
Who gets dividend on shares?
Investors who hold settled shares till the ex dividend date, those are the people entitled to the dividend issue. Even buying before a day of the ex date isn’t appreciable for short term profiteers.
When dividend will be declared?
Dividends are declared after the disclosure of the fiscal performance report. The ex dividend date and the amount as dividend will be specified in the annual report. Dividend stocks or interim payers declare dividend after a quarter results when they feel dividend payment is the best reward to proceed with.