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Dividend Policy

 Self-Paced Overview

Payment Procedures

 

Declaration Date

The Declaration Date is the date on which a firm's board of directors issues a statement declaring a dividend.

Holder-Of-Record Date

This is the date on which the company opens the ownership books to determine who will receive the dividend.

Ex-Dividend Date

This is the date on which the right to the next dividend no longer accompanies a stock, usually two business days prior to the holder-of-record date.

Dividend Reinvestment Plan (DRIP)

DRIP

A DRIP (Dividend Reinvestment Plan) is a plan that enables a stockholder to automatically reinvest dividends received back into the stock of the paying firm. The plan may either involve the firm repurchasing existing shares or it may involve newly issued shares.

Stock Dividends vs. Stock Splits

Stock Dividend

Here, the firm issues new shares in lieu of paying a cash dividend. If 10%, shareholders would get 10 shares for each 100 shares of stock owned.

Stock Split

When the board votes a stock split, the firm increases the number of shares outstanding, say 2:1.

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