INTERVIEW QUESTIONS TAX DIVIDEND DISTRIBUTION TAX DETAILS

Question: What is the Record date for a dividend?

Answer: It is the date on which the share prices represent the corporate benefits declared by the company. The buyers who purchase the shares before the ex-dividend date are entitled to dividend. The book closure date and the record date is always set after the ex dividend date. The ex dividend date is normally set two business days before the record date.

For example, if company ABC declares a dividend to its shareholders, and sets the book closure period 5th July to 7th July, record date as 6thJuly and the ex dividend date as 4th July. This means if you purchase a stock of ABC Company on the 6th of July, you will not be eligible for any dividend declared by the company, as any investor will be eligible for the dividend only if he held the shares before the ex-dividend date.

It is the date on which the share prices represent the corporate benefits declared by the company. The buyers who purchase the shares before the ex-dividend date are entitled to dividend. The book closure date and the record date is always set after the ex dividend date. The ex dividend date is normally set two business days before the record date.

For example, if company ABC declares a dividend to its shareholders, and sets the book closure period 5th July to 7th July, record date as 6thJuly and the ex dividend date as 4th July. This means if you purchase a stock of ABC Company on the 6th of July, you will not be eligible for any dividend declared by the company, as any investor will be eligible for the dividend only if he held the shares before the ex-dividend date. Source: CoolInterview.com

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