Popular Courses
COMM 217
Concordia University
ACCT 2301
The University of Texas at Dallas
Intro to Financial Accounting
General Course
COMM 293
University of British Columbia
Intro to Financial Accounting
University Study Guides
MGCR 211
McGill University
ACCT 1220
University of Guelph
Intro to Financial Accounting
University Study Guides
ADMS 2500
York University
COMMERCE 1AA3
McMaster University
ACCTG 211
University of Alberta
COMM 111
Queen's University
ADM 1340
University of Ottawa
BU127
Wilfrid Laurier University
COMM 1101
Dalhousie University
AFM 101
University of Waterloo
BUS 251
Simon Fraser University
AFA 100
Toronto Metropolitan University
BUSINESS 3321K
Western University
COM 315
University of Victoria
0:00 / 0:00
Dividends
Each year company's decide how much of their profits will be reinvested in the company and how much will be give to its shareholders in the form of dividends. While there is no legal obligation for a corporation to pay dividends, it is often a sign that the business is doing well.
About Dividends
- Can be paid in cash or in stock
- Profits taken from the company by shareholders
- Reduces Retained Earnings
0:00 / 0:00
Dividend Dates
When companies pay dividends to their shareholders, they do so over the course of several days or weeks. It is important to understand the important dates related to the dividends and the accounting that takes place on those dates.
Declaration Date
- Date the dividends are declared
- No dividends are paid
- Liability is created
- Remaining dates announced
Date of Record
- Cut-off date established to determine who is eligible for dividends
- Shareholders on the date of record are called holders of record
- Holders of record will receive the dividend even if the shares are sold before the payment.
- No transaction to record
Ex-Dividend Date
- The deadline to purchase the shares.
- 2 business days before the date of record.
- No transaction to record
Payment Date
- Date the dividends are paid to holders of record
- Dividends payable liability is decreased
Practice: Dividend Dates
Answer the following multiple choice questions.
If Bank of America declares a dividend on January 13th, 2020 to the holders of record on Monday February 3rd, 2020, to be paid on February 17th, 2020. What is the last day someone can purchase the stock to be eligible for the dividend?