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Typically a few weeks before the company goes ex-dividend, an announcement is made. The ex-dividend or ex-D date is considered record date. This means that the owner of record for that stock can only trade out of the stock on EX-D date, and not the day before. People think that EX-D date is the day the dividend is paid. Wrong. The dividend is paid on "payment date" or a few weeks after EX-D date.
Remember the 2 dates: The EX-D date and the PAYMENT date.
Finally, most dividends are paid quarterly. Hence, a stock paying a dividend rate of 4% will pay 1% in dividend each quarter, or 4% for the entire year.
| 14 years ago. Rating: 1 | |
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