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Beginner question, have been looking this up, but don't find specific answers and struggle to understand how this works. Partly fictional example:

I bought 10,000 shares in a company for 0.5$ per share, so investing 5,000$ on March 26, 2020.

On the day before (March 25, 2020) the company announced a dividend of 0.025$ per share with an ex-date of October 2, 2020 with a payment date on Oct 16, 2020.

How do I calculate roughly, what I'm entitled to, if anything?

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Assuming that you don't buy or sell any more shares before the ex-dividend date then you will get a dividend of $0.025 per share or 10000*0.025 or $250.00 on the 20th or October 2020.

The key is what do you own at the start of that key date, not how many days you owned it. Many companies do quarterly dividends, which work the same way.

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  • That's what I thought initially, then it hit me, by October 2020, I would only have had these shares for about 6 months, not one full year. Do you get the full dividend regardless of hold long the shares have been owned for ? I mean, if you buy shares a few days before the ex-div date, are you still getting the full dividend per share? – lmlmlm May 13 at 20:24
  • .. regardless of HOW long .. – lmlmlm May 13 at 20:30
  • @lmlmlm Yes, you get the full dividend - the point is that in theory, you paid for that 1st month of 'accrued dividend earnings', because of the price of the stock at that time. You will notice that the day after dividends earned, stock price will drop by roughly the amount of the dividend, on average. – Grade 'Eh' Bacon May 13 at 21:00

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