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Subject 2. Dividends: Payment Chronology
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The dividend payment procedure is as follows:

  • Declaration date: The date on which a firm's directors issue a statement declaring a dividend. At the time of the declaration, the company will state the holder-of-record date and the payment date.

  • Ex-dividend date (ex-date): The date on which the right to the current dividend no longer accompanies a stock. This is the first date that a share trades without ("ex") the dividend. For a share traded on the ex-dividend date, the seller will receive the dividend. That is, if you buy a stock before this day you can get the dividend; if you buy a stock on or after this day the prior owner gets the dividend. This date is determined by the exchange on which the shares trade.

  • Holder-of-record date: If the company lists the stockholder as an owner on this date, then the stockholder receives the dividend. On this day the company closes its stock transfer book. It is typically two business days after the ex-dividend date. Unlike the ex-dividend date, this is determined by the company.

  • Payment date: The date on which a firm actually mails dividend checks (or, more recently, electronically transfers dividend payments). The date is determined when the dividend declaration is made, and can be any day, including weekends or holidays.

Interval between key dates:

Except for the time between the ex-date and the record date, the time between the other pertinent dates is determined by each company and can vary substantially.
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