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Are you eligible for dividend if trade date is on ex dividend date but settle date is after ex dividend date?
Wiki User
∙ 12y ago
Yes, but trade date must be PRIOR to ex-div date (even immediately prior is ok).
If trade date is just before ex-div date (e.g. one day before), however settlement date is after (for example, three days after ex-div), you still receive dividends.
This is because ownership of shares tranfers on trade date, however it is the transfer of money which occurs on settlement date.
This is what allows you to buy shares, then sell the same shares one hour later, even though no money transaction has occured (the money movements will occur on settlement date, usually three days for shares).
Wiki User
∙ 12y ago
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When must you buy a stock in order to receive it's dividend?
When considering a dividend while purchasing securities there are several dates that are very important. These dates include the declaration date, ex-dividend date, record date, and payable date. First, lets define these dates...Declaration Date - The date on which the company declares it's dividendEx-Dividend Date - The date on which purchasing the security no longer includes it's dividendRecord Date - The date on which you must be registered on the company's books to still receive the dividendPayable Date - The date on which you actually receive the dividendAn Example of how these dates might look on a calendar:March 3rd declaration dateMarch 18th ex-dividend dateMarch 20th record dateApril 10th payable dateThe confusion and mistakes often occur when not accounting for settlement time on an investment. You do not own a stock on the company's books until your purchase has settled. When purchasing a stock, settlement starts on the trade date and takes three business days. Because of this fact the ex-dividend date (or first day stock trades without it's dividend) is two business days before the record date. This allows the stock that is purchased the day before the ex-dividend just enough time to settle on the record date entitling the investor to the dividend.On the other hand, an investor can sell a stock on the ex-dividend date and still be paid it's dividend regardless of if they own the stock on the day it's actually paid.For more information see Related Links for an explanation from the SEC
If stock is purchased a week pre dividend date who gets the dividend?
The person whose name is written on the dividend received book at the time of announcement of divident shall receive the dividend no matters who has the actual dividend paper at the time of announcement date.
What is ex dividend rate?
The ex-dividend date (typically 2 trading days before the record date for U.S. securities) is the day on which all shares bought and sold no longer come attached with the right to be paid the most recently declared dividend. This is an important date for any company that has many stockholders, including those that trade on exchanges, as it makes reconciliation of who is to be paid the dividend easier. Existing holders of the stock will receive the dividend even if they now sell the stock, whereas anyone who now buys the stock will not receive the dividend. It is relatively common for a stock's price to decrease on the ex-dividend date by an amount roughly equal to the dividend paid. This reflects the decrease in the company's assets resulting from the declaration of the dividend. The company does not take any explicit action to adjust its stock price; in an efficient market, buyers and sellers will automatically price this in.
Do you use a debit or credit dividends declared by the corporation?
Dividend TransactionsA. Dividend DatesDeclaration DateThe date on which the board of directors officially approves the dividend. The dividend becomes a liability of the the corporation at this time.Date of RecordThis date is used to establish who will receive the dividend. In other words, whoever owns the stock on this date will received the dividend. Stock sells ex-dividend after this date.Date of PaymentThe date on which the dividend is disbursed to the date or record shareholders. Dividends are always based on the number of shares outstanding. Dividends are not paid on Treasury Stock. B. Cash Dividends With Only Common StockExample:On December 1, 2005 ABC Inc. declares a dividend of $2 pershare. The dividend is payable on December 21 tostockholders of record on December 10. There are 10,000shares of stock outstanding.12/1 Dr / Retained Earnings 20,000Cr/ Dividends Payable 20,000Review dividend terminology. The "declaration date" is the date the board approves the dividend payout. The "date of record" is the date which establishes the stockholders to receive the dividend; that is, if you sell the stock one day before the day of record, you will not receive the dividend. The "effective date" is the day the dividend is disbursed to shareholders.Walk through an example. XYZ Corporation has 10,000 shares of common stock outstanding. On Nov. 10, the board of directors declared a $1 per share cash dividend, to be paid to stockholders of record on Nov. 30. The dividend was distributed on Dec. 10.Record the dividend journal entry on the day of record, which is Nov. 30. Make a debit to retained earnings for $10,000 ($1 x 10,000 shares) and a credit to dividends payable for $10,000. This is what the company issuing the dividend enters on the date of distribution.Use a contra account to hold funds until the distribution date. In some cases, the company will want to create a contra (side) account to hold the dividends until they are actually paid. If this is this the case, then make a debit to dividends declared and then close the balance to retained earnings on the effective (distribution) date.
What is the date on which a cash dividend becomes a binding legal obligation?
Date of declaration
Are you eligible for dividend if your trade date is after ex-div date however you settle on the record date?
No
What is an ex-dividend date?
The ex-dividend date is the date on which a stock no longer trades with it's most recent dividend. Stocks purchased on the ex-dividend date will not settle in time for the record date (date in which you must be an owner of stock on the company's books). Because of this you would not receive the dividend that is soon to be paid out. Stocks are usually noted with an x before their symbol on this date and the quoted price will typically be lower due to the fact that the stock is no longer trading with the dividend.
What is an ex dividend date?
The ex-dividend date is the date on which a stock no longer trades with it's most recent dividend. Stocks purchased on the ex-dividend date will not settle in time for the record date (date in which you must be an owner of stock on the company's books). Because of this you would not receive the dividend that is soon to be paid out. Stocks are usually noted with an x before their symbol on this date and the quoted price will typically be lower due to the fact that the stock is no longer trading with the dividend.
Can you receice dividend if you purchased a stock on ex dividend date?
Normal trade yes, after hour counts as next day.
When must you buy a stock in order to receive it's dividend?
When considering a dividend while purchasing securities there are several dates that are very important. These dates include the declaration date, ex-dividend date, record date, and payable date. First, lets define these dates...Declaration Date - The date on which the company declares it's dividendEx-Dividend Date - The date on which purchasing the security no longer includes it's dividendRecord Date - The date on which you must be registered on the company's books to still receive the dividendPayable Date - The date on which you actually receive the dividendAn Example of how these dates might look on a calendar:March 3rd declaration dateMarch 18th ex-dividend dateMarch 20th record dateApril 10th payable dateThe confusion and mistakes often occur when not accounting for settlement time on an investment. You do not own a stock on the company's books until your purchase has settled. When purchasing a stock, settlement starts on the trade date and takes three business days. Because of this fact the ex-dividend date (or first day stock trades without it's dividend) is two business days before the record date. This allows the stock that is purchased the day before the ex-dividend just enough time to settle on the record date entitling the investor to the dividend.On the other hand, an investor can sell a stock on the ex-dividend date and still be paid it's dividend regardless of if they own the stock on the day it's actually paid.For more information see Related Links for an explanation from the SEC
What time can you sell shares to qualify for the dividend?
You can sell shares to qualify for the dividend on or after the ex-date (ex-dividend date), which will be announced the company
What are the 3 dates and their entries that are associated with dividends.?
In the United States, the three dates that are significant for both paying and accounting for any given cash dividend are: 1) Declaration date: Dividends are not payable unless and until the corporation's Board of Directors declares that a dividend will be paid. The date on which they promise to pay a dividend is called the declaration date, and that is the date on which the company incurs an obligation to pay the dividend. Generally on that date the Board will specify the two other important dates: the ex-dividend date, and the payment date. On the day a dividend is declared, the accounting entries are Debit the Retained Earnings account and credit the Dividends Payable liability account for the total amount of the dividend. 2) Ex-dividend date (or "date of record"): The ex-dividend date is the cutoff date used to identify the particular persons to whom an upcoming dividend will be paid. The shareholders listed on the corporation's records as the owners of shares at the ex-dividend date are the ones who will receive payment of the upcoming dividend, whether or not they still own the shares on the date the dividend is paid. There is no accounting entry related to the ex-dividend date. 3) Payment date: This is the date on which the cash dividend is actually paid out to the shareholders. When the dividend is paid, the accounting entries are: Debit the Dividends Payable account and credit the Cash account for the total amount of the dividend. This eliminates the liablility that was recorded when the dividend was first declared, and reflects the funds going out of the corporation's cash when the dividend is paid.And so, why are we reading this?
Can you sell the stock after ex-dividend date or after record date?
You can sell the stock whenever you want, but you need to own it on the date of record to get a dividend. That means you need to buy it BEFORE the ex-dividend date.
Does stock that pays special dividend always go down by the amount of the dividend?
The ex-dividend date is the day after which all shares bought and sold no longer come attached with the right to be paid the most recently declared dividend. This is an important date for any company that has many stockholders, including those that trade on exchanges, as it makes reconciliation of who is to be paid the dividend easier. Prior to this date, the stock is said to be cum dividend ('with dividend'): existing holders of the stock and anyone who buys it will receive the dividend, whereas any holders selling the stock lose their right to the dividend. On and after this date the stock becomes ex dividend: existing holders of the stock will receive the dividend even if they now sell the stock, whereas anyone who now buys the stock now will not receive the dividend. It is relatively common for a stock's price to decrease on the ex-dividend date by an amount roughly equal to the dividend paid. This reflects the decrease in the company's assets resulting from the declaration of the dividend. However it must be emphasised that there is no direct link between the price and the dividend, this price movement is simply a result of market action. To sum up the date a dividend is paid is not the date a stock usually goes down but rather the date that the stock purchase no longer includes the dividend. This in no way is a guarentee a stock could be up considerably that day based on market conditions and a number of other things even with the downward pressure of no longer being able to receive that dividend.
If an investor buys stock on the ex-dividend date will that individual receive the dividend?
No, the definition of ex-dividend date is trading without the dividend. Any stock purchased "ex-dividend" date is not entitled to the dividend. AND equally as importantly OFFSETTING this - is the insatnt that happens the stock price is reduced by the amiunt of the dividend being paid. NO you cannot "steal" a dividend - that is buy it the day before the divideden gets paid (or ownership date actually) - and sell the day after - all you do is get the dividend and the equally lower stock value.
If you sell a stock on the ex dividend date do you still get the dividend?
yes!
If stock is purchased a week pre dividend date who gets the dividend?
The person whose name is written on the dividend received book at the time of announcement of divident shall receive the dividend no matters who has the actual dividend paper at the time of announcement date.
