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If you have ever freaked out when your share price dipped after your stock went XD, this article is for you.

In this installment of the #AskDrWealth series, we are going to unravel that mystery for you.

We’ll be breaking down the dividend distribution process, giving you the differences between cum dividend and ex dividend, and explain why you shouldn’t freak out (or invest) when prices dip during XD.

Let’s get into it:

What is a Dividend?

Before anything else, let us establish a common understanding of what a dividend is.

A dividend is basically the distribution of a portion of a company’s earnings. It is probably the best benefits you can get from owning a prosperous business as a shareholder.

Dividend payout amounts are decided by the board of directors and can be issued in the …