Final answer:
The Ex-Dividend date is typically one business day before the record date; it's important as it determines who will receive the next dividend payment. Buyers must purchase the stock before this date to receive the dividend; otherwise, the seller gets it.
Step-by-step explanation:
The Ex-Dividend date (ex-date) is a crucial term in the field of finance and investing. It refers to the date on which a stock begins trading without the value of its next dividend payment. Typically, the ex-date is set one business day before the company's record date.
To receive the upcoming dividend, a purchaser must buy the stock before the ex-dividend date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the dividend will go to the seller.
The ex-dividend date is used to ensure that the buyer's name can be recorded by the company in time to receive the dividend.