What is a dividend?
A dividend is a cash payment made by a listed company to its shareholders. Investors who own the shares at the close of trading on the business day before the ex-dividend date are generally eligible to receive the dividend.
If you meet the eligibility requirements, Longbridge will process the payment and credit the cash dividend to your account within 1–3 trading days after the payment date.
On the ex-date, the share price adjusts downward and the position temporarily reflects only the lower share value. Once the dividend is paid (per the timeline above), the shareholder receives the cash dividend, which is intended to offset that earlier price adjustment. The cost basis of the position remains unchanged.
After the dividend is paid, the shareholder’s position changes from shares only, to shares (at the adjusted lower price) + a cash dividend whose value equals the drop in share price.
What is a special dividend?
A special dividend is a type of dividend paid for a specific, non-recurring reason — for example, profits from a particular investment rather than from core business operations. Generally follows the same principles as a regular dividend, although the ex-dividend date and other processing details may vary depending on the circumstances of the distribution.
Four key dates
Declaration Date: The date on which the board declares a cash dividend, specifying the amount per share, the payout ratio, and the ex-dividend, record and payment dates.
Ex-Dividend Date: Investors who hold the stock on the trading day before this date are entitled to receive the dividend. Investors who buy the stock on or after the ex-dividend date are not eligible.
Record Date: The date on which the company determines which shareholders are officially entitled to receive the dividend. The record date is set by the company and announced in advance, and its timing relative to the ex-dividend date varies by market. For investors, the ex-dividend date is the date that determines eligibility.
Payment Date: Also known as the dividend payment date or distribution date, this is when all eligible shareholders recorded on the record date actually receive their dividends.
How to view dividend information
To view dividend information for a stock, navigate to the individual stock page > Overview > Encyclopedia > Dividend Info.