- Companies announce a dividend date or declaration date, besides setting the record date and the payment date for dividend payments.
- Furthermore, the stock exchange sets the ex-dividend date, generally one working day before the record date, which determines the investors’ dividend eligibility.
- The payment date is when the dividend is paid to shareholder through cheque or by crediting the brokerage account or electronically transferring the payment.
What is a dividend?
A dividend or dividend amount is the portion of the profit that a company shares with its shareholders. Furthermore, dividend payouts are made from the profit or earnings retained by the company. Dividends are generally paid in cash and sometimes in stocks. However, the dividend payment is not mandatory. However, it is decided by the board of directors after the approval of shareholders.