The Rio Tinto Ltd (ASX: RIO) share price is under pressure on Thursday morning.
At the time of writing, the mining giant's shares are down 2.5% to $110.04.
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Why is the Rio Tinto share price falling?
The good news for shareholders is that today's decline has nothing to do with a broker downgrade or a collapse in iron ore prices.
In fact, today's decline is technically a good thing for owners of the miner's shares.
That's because the reason for the weakness in the Rio Tinto share price is that it is going ex-dividend this morning.
When a share trades ex-dividend, it means the rights to an upcoming dividend payment are now settled. As a result, anyone buying Rio Tinto shares today will not be entitled to this dividend and the rights will remain with the seller.
In light of this, a share price will usually drop in line with the dividend. After all, why would you pay for something you won't receive?
Rio Tinto dividend
When Rio Tinto released its half-year results last month it reported a 10% decline in revenue to US$26.67 billion and a 25% drop in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to US$11.73 billion.
This weakness was driven by a combination of lower commodity prices and higher costs.
As you might expect, this meant that the Rio Tinto dividend was cut for the first half of FY 2023. It declared a fully franked interim dividend of US$1.77 (A$2.60 at exchange rates of the time) per share for the six months. This was down 33% on the same period last year.
Eligible shareholders can now look forward to receiving this dividend next month on 21 September.
After which, analysts at Goldman Sachs are forecasting the final dividend in August to come in at US$1.72 (A$2.63) per share. This will bring its full-year dividend to US$3.49 per share.
