Important Dates for Dividends
1. Important Dates for Dividends
So let's discuss some important dates for dividends. The first one would be the declaration date, which is the date on which the board of directors announces and approves the payment of a dividend. And if we look below this declaration would include the size of the dividend being issued and it would outline the record date and the payment date, which we're going to discuss in a moment. The next important date would be the ex dividend date, and this is the first day that the stock would trade without a dividend. Note that the company does not set the ex dividend date, it is set by the stock exchange where the company stock is traded. If we look below the ex dividend date typically occurs upto three days before the record date. Purchasers of shares on or after the ex dividend date are not entitled to a dividend. And then we would have the record date, and this is the date on which the investor must be on the company's books in order to receive a dividend. Record date is set by the company. When an investor purchases a stock on an exchange, it takes time for the investor's information to be updated on the company's books. If we look below, we can see that in North America, it takes about two business days for a trade to settle. And finally, we have the payment date, which is the date on which the dividend is actually paid to shareholders. Looking below, we can see the dividend payments may be either mailed or electronically transferred to the accounts of shareholders.2. Let's practice!
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