Introduction To Dividends: Dividend Dates
  1. Introduction To Dividends: Introduction
  2. Introduction To Dividends: Terms To Know And Other Basics
  3. Introduction To Dividends: Dividend Dates
  4. Introduction To Dividends: Investing In Dividend Stocks
  5. Introduction To Dividends: Doing Your Homework And Taxes
  6. Introduction To Dividends: Conclusion

Introduction To Dividends: Dividend Dates

A corporation's Board of Directors must declare all dividends. Four dividend-related dates are important to this process:

Declaration Date
The declaration date is the date that the dividend is announced by the Board of Directors. The declaration statement includes the size of the dividend, the date of record and the payment date (see below). Once the dividend has been declared, the company has a legal responsibility to pay it.

Date of Record (or Record Date)
Once a company announces a dividend, it sets a date of record on or before which you must be on the company's books in order to receive the declared dividend. On the date of record, the company will determine its shareholders, or "holders of record," and the company will use this date to establish to whom it will send financial reports, proxy statements and other information.

Ex-Dividend Date (or Ex-Date)
After the company sets the date of record, the ex-dividend date is set by either the stock exchange or the National Association of Securities Dealers. If an investor purchases a stock on or after its ex-dividend date, he or she will not receive the declared cash dividend; instead, the seller of the stock will be entitled to that dividend. Investors who purchase the stock before the ex-dividend date will receive the dividend.

For example, stock ABC recently announced a cash dividend with an ex-dividend date of December 7. If you purchase 100 shares of ABC stock on December 7 (on or after the ex-dividend date) you will not receive the dividend; the person from whom you bought the shares will receive the dividend. If, however, you purchase the shares on December 5 (before the ex-dividend date) you will be entitled to receive the next dividend. The ex-dividend date for stocks is typically set two business days before the date of record. A stock's price may increase by the dollar amount of the dividend as the ex-date approaches. On the ex-dividend date, the exchange may reduce the price per share by the dollar amount of the dividend.

Note: Procedures for non-cash dividends are a bit different. For example, if a company pays a stock dividend, the ex-dividend date is set the first business day after the stock dividend is paid.

Payment Date (Payable Date)
The payment date is the scheduled date on which a declared dividend will be paid. Only shareholders who owned the stock before the ex-dividend date are entitled to the dividend.

The following table illustrates an example of the relationship between these important dividend-related dates:

Type Declaration Date
Ex-Dividend Date
Record Date
Payment Date
Date Oct. 15, 2012
Dec. 5, 2012
Dec. 7, 2012
Dec. 11, 2012
Notes The date the dividend is announced.
The date before which you must own the stock to be entitled to the dividend.
The date by which you must be on the company\'s books as a shareholder to receive the dividend.
The date the dividend is paid to shareholders.


Introduction To Dividends: Investing In Dividend Stocks

  1. Introduction To Dividends: Introduction
  2. Introduction To Dividends: Terms To Know And Other Basics
  3. Introduction To Dividends: Dividend Dates
  4. Introduction To Dividends: Investing In Dividend Stocks
  5. Introduction To Dividends: Doing Your Homework And Taxes
  6. Introduction To Dividends: Conclusion
RELATED TERMS
  1. Payment Date

    The date on which a declared stock dividend is scheduled to be ...
  2. Declaration Date

    1. The date on which the next dividend payment is announced by ...
  3. Record Date

    The cut-off date established by a company in order to determine ...
  4. Unpaid Dividend

    A dividend that is owed to stockholders of record but has yet ...
  5. Ex-Dividend

    A classification of trading shares when a declared dividend belongs ...
  6. Dividend Rollover Plan

    An investment strategy in which a dividend-paying stock is purchased ...
RELATED FAQS
  1. Why should I pay attention to a dividend's ex-dividend date?

    Understand the importance of the ex-dividend date as the critical date for determining which stockholders qualify to receive ... Read Answer >>
  2. If a company moves its dividend record date forward, does the ex-dividend date change ...

    When a dividend is declared, there are three important dates for investors: the dividend payable date, the dividend date ... Read Answer >>
  3. How can I find out the ex-dividend date for a stock's dividend?

    Learn about the various information sources from which investors can obtain information about upcoming ex-dividend dates ... Read Answer >>
  4. How can I find out what date(s) I am supposed to be entitled to ex-dividends?

    Understand the various dates associated with payment of stock dividends and specifically how the determining ex-dividend ... Read Answer >>
  5. If I sell my shares before the ex-dividend date will I still get the dividend?

    If you sell before the ex-dividend date you will not receive a dividend from the company. The ex-dividend date is the date ... Read Answer >>
  6. How is the ex-dividend date for a dividend on a stock determined?

    Review the important dates concerning dividend payments and learn how the ex-dividend date is determined when a company declares ... Read Answer >>

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