1. Dividend payment procedure A company's dividend policy refers to the manner in which a firm distributes its earnings to shareholders. Firms can pay out cash in one of two ways: ad dividend or a share repurchase. Before 1983, stock repurchases were fairly rare, but today they are common. When a firm decides to pay a dividend, it usually follows the following process Several critical dates play a role in the dividend payment procedure. Identify the critical dividend dates, What is the date that dividend checks are sent to shareholders? Declaration Date Ex-Dividend Date Holder-of-Record Date Payment Date Shares purchased on or after this date do not entitle investors to the stock's dividend. Payment Date Declaration Date Holder-of-Record Date Ex-Dividend Date All shareholders as of this date will be mailed a dividend check. Ex-Dividend Date Payment Date Holder-of-Record Date Declaration Date What is the date that the firm announces its intention to pay a dividend? Ex-Dividend Date Holder-of-Record Date Declaration Date Payment Date