0
Out of all the words used in finance, perhaps one word holds more value for any single investor than all others: dividend. A dividend is a distribution of a portion of the earnings of a company to a specific class of shareholders. A company that sells shares of itself to the investing public organizes those shares into classes with defined rights and benefits. Dividends are rewards paid to investors for giving the company cash.
Dividend payments are made by a company's board of directors arbitrarily. No guarantees exist that a company must continue to pay dividends or start paying them at all. Companies pay dividends on specific dates. Dividends are made via cash payments, share transfers or property transfers. Most dividends take the form of cash or shares. Rarely will a company transfer physical property to a shareholder in lieu of payment by shares or cash.
Multiple dates are associated with dividends.Four actual dates are used in the dividend process. They are the declaration date, the ex-dividend date, the date of record and the date of payment.
The process starts with the declaration date. On this date, the company declares its intent to pay a dividend to its shareholders. Next comes the ex-dividend date, when the company's share price is usually lowered to reflect the value of the paid dividend. An investor can purchase shares of a company one day prior to the ex-dividend date in order to receive a dividend. This is the second business day before the date of record.
The company consults its records to determine who actually owns its shares on the date of record. An investor must be listed among the holders of record to receive any dividends from the company. Finally, the date of payment is when the company actually mails the dividend check to the shareholder.
Dividends are usually calculated as dollars per share. The more shares a particular shareholder owns, the greater his dividend will be on the date of payment. For instance, if a company announces a dividend of $2.00 per share and a shareholder owns 100 shares, his total dividend will be $200.
Wiki User
∙ 11y ago
Add your answer:
Earn +20 pts
How does dividend affect share price?
The dividend is very attractive to potential investors, and if more people are buying the stock the price will go up. Also, on the days leading towards the ex-dividend date (the day you must own the stock to collect the dividend) many investors and institutions will buy up the stock to make a quick profit from the dividend which makes the share price skyrocket.
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
The cumulative feature of preferred stock?
Preferred shares are entitled to the promised dividend, regardless of the company's dividend policy. If the company chooses not to pay a dividend in a given quarter, the amount owed accumulates and must be paid to the holders of the preferred shares before any dividends are paid to common shareholders. The payment is, therefore, cumulative over time if not paid.
Debt securities sold to investors that must be repaid at a particular date some years in the future are called?
bonds payable
When do you usually pay dividends?
Most companies pay out dividends quarterly. In order to earn a dividend, you must own stock in a company on one date, and they pay dividends on another date.
How does dividend affect share price?
The dividend is very attractive to potential investors, and if more people are buying the stock the price will go up. Also, on the days leading towards the ex-dividend date (the day you must own the stock to collect the dividend) many investors and institutions will buy up the stock to make a quick profit from the dividend which makes the share price skyrocket.
Why reports must be made to investors?
They invested money and want to know how you used it and profits from it.
When you divide by 3 can 5 be the remainder?
no you must have a remainder or 2,1, or have no remainder at all your remainder must be smaller than the your dividend your dividend is the number you are dividing by
What is divident policy?
DividendsDividends are payments made to stockholders from a firm's earnings, whether those earnings were generated in the current period or in previous periods. Dividend PolicyOnce a company makes a profit, management must decide on what to do with those profits. They could continue to retain the profits within the company, or they could pay out the profits to the owners of the firm in the form of dividends.Once the company decides on whether to pay dividends they may establish a somewhat permanent dividend policy, which may in turn impact on investors and perceptions of the company in the financial markets. What they decide depends on the situation of the company now and in the future. It also depends on the preferences of investors and potential investors.
The divisor is 7the quotient 9 and remainder 6what is the dividend?
If the divisor is 7, the quotient is 9, and the remainder is 6, then the dividend must be 69.
How do you post dividends?
To post dividends, a company must follow certain steps. First, the board of directors must declare the dividend, specifying the amount and the date of record. Next, the company must update its financial records to reflect the distribution of dividends. Lastly, the company must issue dividend payments to its shareholders either via checks or electronically, depending on the preferred method of payment.
How long do you need to own a stock before being paid dividends?
you must own the stock prior to the ex-dividend date to receive the recently announced dividend. owning the stock one day before the ex-dividend date qualifies an investor to that dividend payout
Must a decimal divisor and a decimal dividend have the same number of decimal places?
No.
Dividend Histories Are Essential To Income Investing?
Investors seeking high dividends often do not give any thought to the stability of those dividends or the commitment of a company to continue paying them. Dividends are highly valued because they can supplement interest income from bonds and rental income from real estate. At times when interest rates and rents are low, dividend payments can be quite high, allowing the investor to sustain a level of income not otherwise possible. Analyzing a company's dividend statements and policy is accordingly one of the most important activities an investor performs. An investor must know beyond a shadow of a doubt that a company has paid dividends in the past and will pay them in the future. When a company makes profits from its activities, the management must choose what to do with them. The company can reinvest its profits in future activities, pay them out to shareholders, or both. Shareholders are at the mercy of the company in terms of receiving dividend payments. There is no guarantee that any dividends will be paid by the company ever. Publicly-traded businesses must build up a strong dividend history in order to be attractive to long-term shareholders. The longer the dividend history, the more confidence investors feel about the business's commitment to paying dividends. A dividend investor can seek steady cash payments that do not increase or decrease or he can buy stocks that have a history of increasing dividend payments. Both approaches are well-known in finance; the second approach is known as dividend growth investing or DGI. Adopting DGI as a preferred strategy requires the investor to study the dividend histories of his stocks, but with an eye towards which companies have historically increased their dividend payments over time. A regular dividend investor is merely looking for a long track record. DGI has an advantage in that dividends can be reinvested over time to buy more stocks. Increasing dividend payments allows reinvested dividends to grow through compound interest, the holy grail of stock investing. Compounding dividends can increase returns far beyond other strategies since the investor uses cash paid to him by his stocks to buy more of them.
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 the dividend and the quotient are both odd numbers how often must the divisor be odd?
Always.
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.
