How are share dividends calculated
Upcoming Stock Dividends
Dividends are generally paid six monthly biannually by Australian stocks and shares.
When investing in dividend stocks, there are a few important dates to keep in mind. These dates will tell an investor when they will receive the dividends and whether or not they are eligible to receive the latest dividend.
What does the Ex-dividend Date mean?
The ex-dividend date 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. 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. 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.
What do the Books Close or Record Date and Payment Date mean?
Shareholders who properly registered their ownership on or before the date of record will receive the dividend. Shareholders who are not registered as of this date will not receive the dividend. Registration in most countries is essentially automatic for shares purchased before the ex-dividend date.
The payment date is the day when the dividend checks will actually be mailed to the shareholders of a company or credited to brokerage accounts.Source: www.sharedividends.com.au