A CUM-DIV MARKET HAS BEEN ESTABLISHED IN (XYZ) LIMITED" Could someone please give an explanation of this type of notice that is announced after a stock goes "Ex-Dividend" ?
From definitions on the internet; when a stock is "CUM-Dividend", the buyer of the said stock is entitled to the next dividend to be paid. This, to me, seems to be a conflicting definition within the context of when the notice is announced. Is that referring to the dividend just announced ? or is that referring to the dividend in six months time ?
What I understand, is that to be entitled to the dividend, you have to be the owner of said stock on the "Record Date" (the register owner). Because a transaction takes 3 business days to complete, you then must have purchased the stock at last 4 days prior to the record date. Though, I think here in Australia the requirement is 6 business days prior the to record date. This is known as the "Ex-Dividend Date", after which time the buyer of the said stock is not entitled to the dividend.
Does this then mean that the owner must hold the stock from the period prior to the "Ex-Dividend Date", until at least after the "Record Date" to be entitled the the dividend ? What happens to the dividend if the stock is sold during the period between "Ex-Dividend" and "Record Date" ?
