What is the first trading day when the seller is entitled to receive the dividend for a stock?

The correct answer is the Ex-date or Ex-Dividend Date. This date is crucial in determining the eligibility of shareholders to receive the upcoming dividend payment. On the ex-dividend date, the stock price typically drops by the amount of the dividend, reflecting the fact that new buyers of the stock on or after this date will not receive the declared dividend.

To qualify for the dividend, a buyer must purchase the stock before this date, as ownership must be established by the close of trading on the day preceding the ex-date. Therefore, only those who own the stock before the ex-date will be entitled to receive the dividend when it is paid out. This date is established by the stock exchange, and it is a standard part of the dividend distribution process that investors need to be aware of.

The declaration date, record date, and payable date are also important milestones in the dividend payment process, but they serve different purposes. The declaration date marks when the board of directors announces the dividend and its details. The record date is when the company determines which shareholders are on record to receive the dividend, but it falls after the ex-date. The payable date is when the dividends are actually paid out to eligible shareholders, but it is irrelevant in determining eligibility since that