hi, in coursenote chapter 14 question 14.13, it mentions "goes ex-dividend". However, I have no idea about what is "goes ex-dividend". Could you please tell me what is "goes ex-dividend"? Is it difference from paying a coupon?
A share goes ex-dividend when the eligibility date for receiving the dividend has passed. For example, if a dividend is to be paid on May 1st, the ex-dividend date might be April 1st. If B purchases the share from A after April 1st then B gets the share but not the dividend (which is still paid to A). The share price drops on the ex-dividend date by approximately the value of the dividend. I've used shares/dividends above but same applies with bonds/coupons.
