Cum-Dividend is means with dividend, i.e. any person buying shares of stock of an issuer before ex-dividend date is entitled to the dividends declared on such stock. It refers to the share (quoted in the Stock Exchange) which means that a buyer of the share is entitled to the dividend declared on it at the time of purchase. If you buy shares when you’re entitled to the most recently declared dividend, this is known as the shares being ‘cum dividend’. It is the status of a security when a company is preparing to pay out a dividend at a later date. The company would be announcing the number of dividends that will be paid out soon.
If the shareholder sells a “cum-dividend” stock, he/she will not be entitled to the dividend. If you buy shares cum-dividend, you are buying them at a time when you will be entitled to receive the next dividend. A stock trades cum-dividend up until the ex-dividend date. On or after this point, the stock trades without its dividend rights. If a share is sold cum dividend, the buyer will receive the dividend that was declared just before the share was bought.
Cum dividend describes a share whereby the buyer will receive the next dividend scheduled for distribution. Stocks are usually “cum dividend” for trades made on or before the third trading day preceding the record date when the register of eligible holders is closed for that dividend period. If restrictions on entitlement to dividends didn’t exist, people would simply buy shares the day before the dividend was due, collect it and then sell them the day after. It is the status of a stock when the company is preparing to pay out a dividend in the near future. The owner of shares purchased cum dividend is entitled to an upcoming already-declared dividend.
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