What is Dividend? How to get benefit of dividend

Published: 2024-04-04 22:57:34

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Dividend is additional incentive for the stockholders to hold for long term. It is issued by the company and distributed periodically depending on the company's business and current economic conditions.

If the dividends are declared, you will receive a check, the amount of which depends on the size of the dividend the directors have declared and the number of shared you own. Here are some important dates for dividends:

• Declaration date: The date directors announce information about the firm's next dividend. The announcement includes the amount of the dividend, the date the firm will use to determine who is to receive the dividend, and the date the dividend is to be paid.
• Ex-dividend date: The first date new buyers of the firm's stock will not receive the dividend that has been declared. Only shares purchased prior to the ex-dividend date have the right to the declared dividend. Newspapers typically place the letter x beside a stock that traded ex-dividend.
• Stockholder-of-record date: The date an investor must be listed as a stockholder on the firm's books in order to receive the upcoming dividend. The stockholder-of-record date is two business days after the ex-dividend date.
• Payment date: The date the company pays the dividend to stockholders listed on the firm's books as of the stockholder-of-record date. The payment date is likely to follow the declaration date by a month or more.