The Rio Tinto Limited (ASX: RIO) share price has taken a tumble on Thursday morning.
In early trade, the mining giant's shares are down 3.5% to $95.67.
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Why is the Rio Tinto share price sinking?
The good news for investors is that today's decline has nothing to do with the company's performance, the economy, or the price of iron ore.
The weakness in the Rio Tinto share price is actually good news for shareholders. Today's decline has been driven by the mining giant's shares trading ex-dividend this morning for its upcoming interim dividend.
This means that if you were on the company's share register at the close of play on Wednesday, you'll be in line to receive Rio Tinto's second highest interim dividend in its history.
Unfortunately, buyers of its shares today and onwards will not be entitled to this dividend. As such, its shares have fallen to reflect this.
What is the Rio Tinto dividend?
At the end of last month, Rio Tinto released its half year results and revealed underlying EBITDA of $15.6 billion.
This allowed the company's board to declare an interim dividend of 267 US cents per share. This equated to a fully franked $3.837 per share in local currency.
Eligible shareholders can now look forward to being paid this dividend in around six weeks on 22 September.
Based on the Rio Tinto share price at yesterday's close of $99.18, this represents a yield of approximately 3.9% for investors. And there's still a final dividend to come early next year!
And given that the Rio Tinto board decided to be conservative with this dividend, that final dividend could be even larger if commodity prices remain solid between now and then.
