What is Stock Dividend?

A company may share its earnings with shareholders if it declares its earned profit in its quarterly results. The number of shares held by an individual determines how much share they receive. This is called a dividend. To make stocks more attractive to investors and retain them, a company may pay a dividend.

When are stock dividends paid?

Here are some important dates to keep in mind:

1. Declare Date: This is the date that the company declares the dividend. It includes the dividend amount, ex­dividend date, and payment date.

2. Record Date: This is the date that the company must register an investor. Only shareholders who are on the official record have the right to receive a dividend payment. It is necessary to purchase stocks at least 2 days before the record date to be eligible for a dividend payment.

3. Ex-Date is the date before the record date. You will not be eligible for the dividends if you buy shares after the ex-date. The ex-date will be determined by the Indian stock exchanges.

4. The payment date is typically one month after the record date. The Payment Date is when the declared stock dividends will be paid.

How does dividend payout calculation work?

Dividend payout is the sum of the annual dividend per share and the net income of the company. If the dividend is 10 cents per share, and you have 100 shares you will get a dividend of 1000. In 2 business days, the dividend payout will be received.

What is the dividend?

You can choose to receive the dividend monthly, quarterly or semi-annually. Or, you could get it annually. There may not be a set payout schedule. If the company has exceptional profits, they might also pay out one-time dividends. You can choose to receive cash or stocks in addition. Dividends can also be used to purchase shares on the open market. The dividend cheque is typically credited to your bank accounts.

Sometimes, the cheque will be mailed to you. Dividend interest is taxable. Dividends can provide a steady and regular income. Start your Angel One trading accounts today.