An abbreviated form of cum dividend; a stock trades cum dividend (with or including dividend) when buyers qualify to receive the next dividend payment. The cum-dividend price includes the amount dividend which the company may distribute. Usually, stocks trade cum dividend until the fifth business day before the record date. Similarly, a bond is traded cum dividend (with or including coupon) between the coupon payment date and the next ex-dividend date so that the buyer is entitled to the next coupon payment. The seller is compensated for losing the right to receive the next coupon payment by receiving accrued interest instead.
Finance
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