Ask Colin

Could you enlighten me as to the payments of dividends? Are you entitled to dividends from the moment you purchase shares in a company, do you have to have been a shareholder for over a year, do you have to be a shareholder on the anniversary date of the dividend issue?

Dividends are paid to the person who owns the shares as at a date set by the company. Basically, what the company does is rule off its share register on a set date for this purpose. This is known as the book closing date. So that people trading in shares know where they stand, there is a prior date on which the shares begin trading without entitlement to the dividend. This is known as the "Ex" date - the date the shares begin trading "Ex" or without the dividend. Prior to that, they are said to be trading "cum" or with the dividend. The books closing dates and Ex dates for dividends are published regularly in the Monday edition of the Australian Financial Review. Your broker should also be able to give you this information.

Keyword:

DIVIDEND