Dividend refers to the portion of the profit which is distributed by the company to its shareholders. However investor must be conscious of the various dates involved with respect to dividend, because there are many dates involved with respect to dividend which can be summed up as follows
1. Declaration date – The declaration date is defined as the date on which the board of directors of the company declares that they will be paying dividend.
2. Record date – The record date is defined as the date on which the shareholders who have shares are entitled to get the dividend. So for example if the record date for dividend is 20th may 2010 then all the shareholders who have shares of the company on 20th may 2010 are entitled to get dividends.
3. Ex-dividend date – The ex-dividend date is defined as the date subsequent to which every share that is traded does not have any right to claim the dividend. So if any investor who is buying the stock on ex- dividend date will not be entitled for any dividend.
4. Payment date- As the name suggests it refers to the date on which the cheques of dividend will be sent to shareholders or deposited in their brokerage accounts.