# How does dividend payout happen?

Intel Corporation's board of directors has declared a quarterly dividend of 22.5 cents per share (90 cents per share on an annual basis) on the company's common stock. The dividend will be payable on Sept. 1, 2014, to stockholders of record on Aug. 7, 2014.

Does the above mean I can sell stock on Aug 8th and still get a dividend or do I have to wait until Sep 2nd?

• Please note that the ex-dividend date and record date are different. The ex-dividend date is 2 business days before the record date. The record date is when all the sales and purchases from the day before ex-dividend get settled, i.e. record date = 1 business day before ex-dividend + T3. Commented Aug 1, 2014 at 0:57

You will need to buy a stock before the ex-dividend date to receive the dividends. You can sell a stock on the ex-dividend date or after and you will receive the dividends.

So if the ex-dividend date is the 5th August, you need to buy before the 5th and you can sell on the 5th or after, to receive the dividends.

Definitions from the ASX:

Record date

The Record Date is 5.00pm on the date a company closes its share register to determine which shareholders are entitled to receive the current dividend. It is the date where all changes to registration details must be finalised.

Ex dividend date

The ex dividend date occurs two business days before the company's Record Date. To be entitled to a dividend a shareholder must have purchased the shares before the ex dividend date. If you purchase shares on or after that date, the previous owner of the shares (and not you) is entitled to the dividend.

A company's share price may move up as the ex dividend date approaches and then fall after the ex dividend date.

As the record date is 7th August, you need to hold stocks on the 7th August closing. You need not hold it till 2nd Sept. The list as taken on 7th August would be processed and instructions given to Bank and the dividends credited by 1st Sept.

Edit: To Clarify Victor's comment

Typically from the time one sells the stocks to the time it actually gets transferred has a clearing cycle. Most stock exchanges have 2 or 3 days cycles. i.e. if I sell the stock today, it is still in my name. The money is still with the buyer. On Day 1, the positions are arrived at. On Day 2 the stock gets credited to the buyer and the funds gets credit to seller.

As the question was specific whether to hold the stock till 7th or 22nd Sept, my initial answer was simple. The illustration by Victor is more accurate.

• The two answers to this question now disagree on whether or not one must hold the security through closing on the ex-divided date. You say yes, @Victor says no.
– dg99
Commented Jul 31, 2014 at 17:47
• The answers are in agreement. You can sell the stock on August 7th (or as early as August 5th, possibly) and still receive the dividend. Commented Jul 31, 2014 at 18:17
• This answer is wrong; From Wikipedia - The ex-dividend date is 2 business days prior to the record date. To be a stockholder on the record date and be entitled to receive the dividend, the stock must be purchased before the ex-dividend date. To be entitled to the dividend an investor does not have to wait until after the record date to sell the stock; the investor must only hold the stock until the ex-dividend date. If the investor were to sell the stock on the ex-dividend date or afterwards, the investor would still be entitled to the dividend. Commented Aug 1, 2014 at 0:19