The Magellan Financial Group Ltd (ASX: MFG) share price is having a tough time on Wednesday.
In morning trade, the fund manager's shares are down almost 8% to $9.73.
Why is the Magellan share price sinking today?
The good news for shareholders is that this decline has nothing to do with another funds under management decline or a broker downgrade.
Instead, it could be argued that this decline is actually good news for shareholders.
That's because the pullback in the Magellan share price has been driven by its shares trading ex-dividend this morning for the company's next dividend payment.
When a share trades ex-dividend, it means the rights to an upcoming dividend payment have been settled. As a result, anyone buying its shares today will not be entitled to receive this payout when it is paid.
Understandably, investors don't want to pay for something they won't receive. So, a share price will tend to fall in line with the dividend to reflect this on the ex-dividend date.
The Magellan dividend
In case you missed it, last week Magellan released its FY 2023 results.
And while the result itself was very poor, with its earnings more than halving, the company declared a juicy dividend that got investors excited.
Magellan is paying a final dividend of 35.6 cents per share, a performance fee dividend of 4.2 cents per share, and a special dividend of 30 cents per share.
This is a total of 69.8 cents per share that will now be heading to eligible shareholders next month on 7 September.
Based on the Magellan share price at the close of play yesterday of $10.55, this equates to a very attractive 6.6% dividend yield.
