When companies earn money from its business, sometimes, the companies will declared dividends to share the profit and earnings with the shareholders.
Moreover, many investors view a steady dividend history as an important indicator of a good investment.
When companies announce to pay dividend, inside the statement, there are 4 important dividend date that investor must aware of. The 4 important dividend date are as following.
- Declaration Date - The date that the company's directors finalized and declared the amount of dividend,ex-date, record date, and payment date.
- Ex-date or Ex-dividend date - This is the date that the stock will be traded on price after deducting the dividend per share. For investors that want to entitle for the dividend, they must successfully bought the stock the day before Ex-Date or Ex-dividend date.
- Record Date - The date that the security exchange will retrieve the list of eligible shareholders for dividend at the end of the day.The shareholders in the list will be entitled to receive the dividend.Sometimes, this date is also referred as date of record.
- Payment Date - The day that the issuing companies will mail out the cheque for eligible shareholders.Sometimes, this date is also referred as payable date.
It is important for investors to know all these 4 important dividend date clearly in order to understand clearly how the pay out of dividend being process. Besides the important dividend date, there are some myth of dividends that investors need to understand.