The ASX 200 index is charging higher today but the same cannot be said for the New Hope Corporation Limited (ASX: NHC) share price.
In early trade, the coal miner's shares were down as much as 7.3% to $6.88.
The New Hope share price has recovered a touch since then but remains down 5.5% to $7.01.
Why is the New Hope share price sinking?
Given that the rest of the share market is booming today, investors may be wondering why the New Hope share price is out of form.
Especially given that fellow coal miners Coronado Global Resources Inc (ASX: CRN) and Whitehaven Coal Ltd (ASX: WHC) have started the week strongly.
The good news is that New Hope's shares are not falling because of a bad update or a broker downgrade. Rather, the coal miner's shares have dropped into the red today because they are trading ex-dividend.
When a share trades ex-dividend, it means that the rights to an upcoming dividend payment are now locked in. As a result, if you were to buy New Hope's shares today, you wouldn't be entitled to that dividend and it would stay with the seller of the shares.
In light of this, a share will usually drop in line with the size of the dividend to reflect this. After all, you don't want to pay for something you won't receive.
The New Hope dividend
Last month when New Hope released its full year results, the company reported a huge profit thanks to sky high coal prices. This allowed the New Hope board to declare a mammoth fully franked final dividend of 56 cents per share.
Based on the New Hope share price at Friday's close, this equates to a yield of 7.5%. Not bad for just a final dividend!
Eligible shareholders can now look forward to receiving this dividend on 8 November.
