Question

Q. Briefly explain the different relevant dates of dividend policy. Provide a real-life example of any company from "Dhaka Stock exchange".

Answer 1

There are basically four relevant dates of dividend policy. each one of which is mentioned and explained below:

1) Declaration Date: The declaration date is the date on which the dividend is approved and declared by the board of directors of the company. On this day, the amount or the percentage of the dividend to be distributed is announced and declared.

2) Ex-Dividend Date: The Ex dividend date is the date which is set up by the stock exchange on which the company's stock is traded for the trading without a dividend. Anyone who purchases the shares on or after the ex dividend date are not eligible for the dividend of the company.

3) Record Date: The date on which the investor must be there on the company's books in order to receive the dividend is called as the record date. The record date is later than the Ex dividend rate.

4) Payment Date: The date on which the dividend is paid to the shareholders is called as the payment date. The payments can be mailed or electronically transferred to the accounts of the shareholders.

Example: NFM i.e National Fertilizers Ltd. is the stock on Dhaka stock exchange. Recently it has declared the interim dividend on 19/09/2020. So, 19/03/2020 will be the declaration date of NFM.

When the share of the NFM will be traded on the Dhaka stock exchange that date will be thee ex Dividend date.

The record date will be the date when the investors of NFM will be entered in NFM's books of accounts.

And when finally, NFM will pay the declared dividend to its investors, it will be the payment date.