The payment of a specific cash dividend to shareholders involves four dates–the announcement date, the ex-dividend date, the dividend date, and the payable date.
Some of them mean exactly what they sound like.
The announcement date simply refers to the date on which a corporation decides to disclose to the public that a dividend will be coming in the future. It is of nearly no legal significance, and it confers no rights. The only time I have ever seen the announcement date matter is in the context of insider trading. If a company executive traded the stock of his corporation before the announcement of a one-time special dividend, it may be used to prove the case. But for a typical investor, the announcement date is only relevant for conveying information about the dividend to come.
The ex-dividend date is three days before the record date, and this is tied to … Read the rest of this article!