A company declares the dividend, the amount, and the date when it will be paid out to shareholders when it enjoys a profit and decides to pay that dividend to common shareholders. Dividend amounts and related dates are usually determined every quarter after a company finalizes its 澳洲幸运5开奖号码历史查询:income statement and the board of directors meets to review t✱he company's financials.

Some companies with solid histories of paying dividends have established quarterly dividend payment dates. IBM usually pays its dividends on the 10th of March, June, September, and December.

Key Dividend Dates

All qualified shareholders of the company are notified via a press release when a dividend is declared. The information is usually reported through major stock quoting services for easy r🐻eference. Investors should be aware of fou🌞r key dividend dates:

• The declaration date: This is the date when the dividend is declared and the dividend amount, ex-date, record date, and payment date are set.
  
• The 澳洲幸运5开奖号码历史查询:ex-dividend date: The "ex-date" is the date before which an investor must have purchased the stock to receive the upcoming dividend. The stock begins trading "ex-dividend" or without the dividend on this day.
• The 澳洲幸运5开奖号码历史查询:record date: This date determines all shareholders of record who are entitled to the dividend payment and it usually occurs two days after the ex-date.
• The 澳洲幸运5开奖号码历史查询:payment date: This is when dividend payments are issued to shareholders and it's usually about one month after the record date.

How Dividends Are Paid

A dividend is the distribution of some of a company's earnings as cash to a class of its shareholders. Dividends are typically credited to a brokerage account or paid in the form of a dividend check. The dividend check is mailed to stockholders but can be directly deposited to a shareholder's account of choice if preferred.

The alternative to cash dividends is additional shares of stock. This is referred to as dividend reinvestment. Dividend reinvestment plans (DRIPs) are commonly offered by individual companies and 澳洲幸运5开奖号码历史查询:mutual funds.

When Dividends Are Paid

The company deposits the funds for disbursement to shareholders with the 澳洲幸运5开奖号码历史查询:Depository Trust Company (DTC) on the payment date. Cash payments are then disbursed by the DTC to brokerage firms around the world where shareholders have accounts that hold the company's shares. The recipient firms appropriately apply 澳洲幸运5开奖号码历史查询:cash dividends to client account♔s or they process reinvestment transactions per a client's instructi⛦ons.

Mailed checks should be received within a few d♋ays of the payment date.

Dividend Reinvestment Plans (DRIPs)

A dividend reinvestment plan (DRIP) offers several 澳洲幸运5开奖号码历史查询:advantages to investors compared to receiving the dividend payment in cash and then using the cash to purchase additional shares. Automatic dividend reinvestment simplifies the process if theꦜ investor pref𝕴ers to build their current equity holdings using funds from dividend payments.

Company-operated DRIPs are usually commission-free because ꧂they bypass a broker. This feature is particularly appealing to small investors because commission fees are proportionately larger for smaller purchases of stock💟.

Another potential benefit of DRIPs is that some companies offer stockholders the option to purchase additional shares in cash at a discount. Investors can acquire additional stock holdings at an advantageous cost compared to buying shares in cash through a brokerage firm and there's the added benefit of not paying commission fees.

Tax Implications of Dividends

Dividends are always considered 澳洲幸运5开奖号码历史查询:taxable income by the 澳洲幸运5开奖号码历史查询:Internal Revenue Service (IRS) regardless of the form in which they're paid.

Specific tax implications for dividend payments vary depending on the type of dividend declared, the type of account in which the shareholder owns the shares, and how long the shareholder has owned the shares. Dividend payments are summarized each tax year on 澳洲幸运5开奖号码历史查询:Form 1099-DIV.

The Bottom Line

Dividends are a way for companies to distribute profits to their shareholders but not all companies pay dividends. Some may decide to retain their earnings to re-invest 🧔in growth opportunities instead.

A company will declare the amount of the dividend and all relevant dates if dividends are to be paid. All holders of the stock before the ex-date will then be paid accordingly on the upcoming payment date. Investors𝓰 who receive dividends can typically choose 𝔍to take them as cash or as additional shares.