The Flight Centre Travel Group Ltd (ASX: FLT) share price is falling on Tuesday.
In morning trade, the travel agent's shares are down 1% to $21.08.
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Why is the Flight Centre share price falling?
This morning, Flight Centre's shares traded ex-dividend for its first interim dividend since the pandemic.
When the company released its half-year results last month, it reported a 99% increase in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $189 million.
Things were even better on the bottom line, with underlying profit before tax jumping 565% over the prior corresponding period to $106 million.
This put the Flight Centre board in a position to declare its first interim dividend since 2019. It announced a fully franked interim dividend of 10 cents per share.
The Flight Centre share price is dropping today after going ex-dividend for this payout.
That's because when a share trades ex-dividend, it means the rights to an upcoming dividend payment are settled.
So, if you were to buy its shares today, you wouldn't receive the pay out when payday comes around. Instead, the dividend will go to the seller of the shares even though they're no longer in their portfolio.
In light of this, a share price will tend to drop in line with this dividend to reflect this. Sometimes it will drop more if some investors have been waiting for the dividend before selling their shares.
In addition, a weak session on the share market can further add to the selling pressure, which could be happening today.
Nevertheless, the Flight Centre share price remains up 15% over the past 12 months.
And if you are one of the company's eligible shareholders, you can now look forward to receiving this 6.5 cents per share dividend next month on 17 April.
