Choice dividend issue
What is a choice dividend issue?
This is when a company’s board of directors approves the decision to issue a dividend to shareholders, paid in either cash or additional stock. The issue includes the size of the dividend and payment dates. Once the dividend has been declared, the company is legally obliged to pay it.
Where have you heard about choice dividend issue?
During the banking crisis, some big companies such as Lloyds Bank stopped issuing dividends, so the announcement of a dividend issue is always good news for investors.
What you need to know about choice dividend issue.
The decision to issue a dividend is taken at a company's AGM. Payment isn’t made straight after the announcement though, because shares are traded throughout the year so a company has to work out who gets the dividend.
In the period between declaration date and payment date is the record date. This is the day on which a company consults its records to see the current list of shareholders. If you sell your stock before the record date, you won't be entitled to the dividend payment.