Declaration Date
Quick definition: The declaration date is the day a company's board announces a dividend, including its amount, record date and payment date.
In plain English
Before a dividend is paid, the board of directors must approve it. The day they announce it is the declaration date. The announcement sets the amount per share and the other key dates.
Example
On February 5, a company announces a quarterly dividend of $0.75 per share, payable on March 20 to shareholders of record on March 6.
Why it matters
Once declared, a dividend becomes a legal obligation for the company. Until then, it is only a pattern of past payments.
Common mistakes
- Treating past dividends as a promise. Only declared dividends are committed.
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