1. Dividend payment procedure Aa Aa 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: a 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. In the following table, identify the critical dividend dates. Declaration Ex-Dividend Payment Holder-of-Record Date Date Date Date Date The firm announces its intention to pay a dividend Shares purchased on or after this date do not entitle investors to the stock's dividend. Dividend checks are sent to shareholders. All shareholders as of this date will be mailed a dividend check