Question

When a company pays a dividend, it isn't as simple as getting a paycheck from one's employer. There are several critical dates in the dividend payment process. Identify each of the critical dividend dates in the table.
The date on which a firm's director issues a statement announcing a dividend.
Date - _____
The firm actually sends the dividend checks on this date.
Date - _____
If the company lists the stockholder as an owner on this date, then the stockholder receives the dividend.
Date - _____
The date on which the right to the current dividend no longer accompanies a stock.
Date - _____

Answer 1

Answer: 1. Declaration Date

2. Payment Date

3. Holder-of-record date

4. Ex-dividend date

Explanation:

1. On the Declaration Date, the company's Director announces that they will pay a dividend as well as the amount of the dividend. This is recorded in the books by crediting it to Dividends payable.

2. On Payment day the dividends are disbursed amongst shareholders. Cash Account is credited and Dividends Payable is debited.

3. The Holder-of-record day is the day the company notes who the owners of it's stock are so that they may receive the dividend.

4. On the Ex-dividend date which is usually 2 days before the record date, any stock bought on or after this date will.not receive any Dividend payment.