Dividend Dates - Understanding the Important Dividend Related Dates

Описание: Understanding the important dates related to dividends:

1. Declaration Date - Declaration date is the date on which the Board of Directors of the company make an announcement about its decision to pay out dividends. The Board announces the dividend amount per share as well as the record date and payment date.

2. Ex-dividend Date - Ex-Dividend Date is the date on which the shares of a company no longer come attached with the right to receive the declared dividend. This date is not set by the company, but by the stock exchange on which the company's stock is trading. We have a T + 2 settlement cycle in India, which means that it will take two trading days (T+2) from the date of purchase for a shareholder's name to appear in the company's shareholders list. Due to this reason, the ex-dividend date is set a day prior to the record date. If you want to receive a stock's dividend, you have to buy the shares before the ex-dividend date, so that your name appears in the shareholders list on the record date.

3. Record Date - Record date is simply the cut-off date on which an investor must be in the records of the company's shareholders list in order to be eligible to receive the dividend declared.

4. Payment Date - Payment Date is the date on which the dividend is paid to shareholders, either by mail or by electronic transfer to the shareholders' accounts.

With the help of an example, you will understand the process through which shareholders receive dividends, starting from dividend announcement, all the way till the date of receiving it in your account. Asian Paints recently declared dividend of Rs. 15.50 per share. Here we will understand the important dates and deconstruct the dividend payout process from the shareholders' point of view.

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