Legal Definitions - dividend date

The dividend date is the specific day on which a corporation officially distributes dividend payments to its eligible shareholders. This is the actual payout date when the money or other assets are transferred to the accounts of individuals or entities who were recorded as owning shares by a previously established "record date."

• Example 1: Regular Quarterly Payout
  "Tech Innovations Inc." announces that its board has approved a quarterly cash dividend. They set a record date of April 1st, meaning anyone owning shares on that date will be eligible. The company then specifies a dividend date of April 15th.

  Explanation: On April 15th, Tech Innovations Inc. will initiate the transfer of dividend payments to all shareholders who were officially listed as owners of their stock on April 1st. This is the day the financial transaction occurs, and shareholders receive their distributions.

• Example 2: Special Dividend After a Major Sale
  "Manufacturing Solutions Corp." successfully sells off a non-core business unit, resulting in a significant cash influx. To share this profit with investors, the board declares a special one-time dividend. They announce a record date of September 5th and a dividend date of September 20th.

  Explanation: September 20th is the day Manufacturing Solutions Corp. will make the special dividend payments to everyone who held their stock on September 5th. It marks the actual distribution of the special payout to eligible shareholders.

• Example 3: Dividend for a Real Estate Investment Trust (REIT)
  "Urban Properties REIT" (a company that owns and operates income-producing real estate) is legally required to distribute a large portion of its earnings as dividends. For its monthly distribution, it sets a record date of the 10th of each month and a dividend date of the 25th of each month.

  Explanation: On the 25th of each month, Urban Properties REIT processes and sends out the dividend payments to all shareholders who were on record as owning shares on the 10th of that month. This consistent dividend date ensures shareholders know exactly when to expect their income distribution.