Rights To Dividends After Sellings Shares?

[Stockbear]

I have read on several occasions that after selling their shares in a company, the seller still gets paid dividends,

How is this possible? Does the new owner also get paid dividends? If yes, I need to understand how this possible.

[ghm]

Every stock have a date of closure. Whoever holds a share at the closure date will get the dividend/bonus.

Also, the person on the register on this day is dependent on when the stockbroker entered it it the register especially if you are buying around the closure date.

[Stockbear]

@ Ghm - Please could you elaborate further? From what I gathered, this particular individual has continued to receive dividends continuously long after selling the shares on.

let's assume that I'm on the books after closure date, does this means I continue to receive dividends indefinitely? What happens to the new owner?

[paragon]

hi there, i believe once you read this piece, it would enlighten you the more. it's from our archives.

There are four important date’s for any company paying dividends that an investor in any publicly quoted company should know: declaration date, ex-dividend date (ex-date), date of record, and date of payment (payable date).

Declaration date: This is the date on which a company’s directors meet to announce dividend payment to shareholders and the capital market as a whole, once the payment has been authorized, it is called a declared dividend.





Ex-dividend date: On or after this date, which is two days before the ‘date of record’, the security trades without its dividend. You would only lose your right to dividend on a dividend paying stock if you fail to buy a day before this date. On the other hand, you will retain you will still receive your dividend warrant after selling your dividend paying stock provided you sold on or after this date.



Date of record: This is the date set aside by a company’s board of directors for the registrar to close the register of the share holders and to identify the recipients of the declared dividend. Every listed shareholder in the register on this date is a ‘holder of record’, and such any one whose name was not found written in the dividend paying company’s register (record of owners) on this date is not entitled to the declared dividend as he/she is not a holder of record.



Date of payment: This is the date the company mails out the dividend warrant to the holders of record.



Why are these four dates important? Answer: to ensure that you are a record holder you need to buy a stock at least three days before the date of record, which is just a day before the ex-dividend date. On the other hand, you should sell latter than three days before the date of record. In today’s market, it takes three days from the transaction date (T) for the change to be entered into the company record book. That is why it is described as a T+3 process.

[ghm]

Paragon has taken time to give elaborate explanation on how it should be.

However, there may be an exception which is most of the time human error. Maybe the stockbroker did not do his/her work in registrating with the CSCS properly or the registrar made some mistakes.

I have experienced a situation where I am receiving double dividends and double bonus for some of my FBN shares but it stopped when I submitted the certificates for verification. The first was instantly verified and the second one could not be verified till date. I don 't know what happened but it's obvious it's an error and I know it.

I have also experienced a situation where I am receiving dividends on a smaller units than I bought. This was corrected after some exchanging a couple of mails with the registrar.

The Lesson here is that, all should try as much as possible to monitor their investments.

[sega]

hello my fellow members.Can anybody please tell me if the eternal oil IPO is out and the issuing houses selling..I will also want to know if any of you is aware of some investment opportunities around,i have heard of the oil slot that you will deposit 450,000 naira and you will get 40,000 naira every month..and on and on like that...Please how true is all this investment opportunities????

Kindly get back to me immediately.segal02@hotmail.com

[Stockbear]

@ sega - visit www.nairaland.com. You will find ample info there.