Date of payment

Definition

Date of payment is the specific date on which a declared dividend is paid to shareholders. It signifies the moment when the company disburses cash or other forms of dividends to its investors.

5 Must Know Facts For Your Next Test

1. The date of payment follows the declaration date and the record date in the dividend distribution process.
2. Shareholders who own shares on the record date are eligible to receive the dividend on the date of payment.
3. The company's cash account decreases by the total amount of dividends paid out on this date.
4. For property and stock dividends, this is when shareholders physically receive their additional shares or property.
5. It impacts financial statements by reducing retained earnings and increasing liabilities until the payment is made.

Review Questions

Related terms

Declaration Date: The date on which a company's board of directors announces its intention to pay a dividend.

Record Date: The cutoff date established by a company in order to determine which shareholders are eligible to receive a dividend.

Ex-Dividend Date: The first day that new buyers of a stock will not be entitled to receive its recently declared dividend.