Sunday, March 15, 2009

Four Significant Dividend Dates

The four following dates are important terms to understand in the distribution of a dividend by a corporation.

  1. Date of Declaration is the day that the dividend is declared by the board of directors of a corporation. At this time, a liability is created on the balance sheet to make the payment come into existence.
  2. Ex- Dividend Date is a date that indicates who is able to receive the dividend. An investor who buys the stock before the ex-dividend date is entitled to receive a dividend from the corporation. On the other hand, an investor who sells their stock before the date will not receive a dividend.
  3. Date of record usually follows the date of declaration by three to four weeks. In order to receive payment of the dividend an investor must be listed as the owner of a stock on this date.
  4. Date of payment is the date on which an investor will be paid a dividend. It usually comes two to three weeks after the date of record
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