The dividends you'll be paid are calculated using the following formula:
Number of shares you own in X company (before the ex-dividend date) multiplied by dividends per share declared by X company.
Important dividend dates:
Ex-dividend date: You must own shares in X company before this date to qualify for a dividend. This date is set by the U.S. Securities and Exchange Commission and is one business day before the record date.
Record date: You must be on the books and records of X company by this date to qualify for a dividend. Since it takes two business days for orders to settle, you need to buy securities 2–3 business days before this date to qualify for a dividend. This date is set by the company.
Pay date: The date the dividend is paid out to shareholders.
For example:
Apple declared a dividend per share of $0.22 with a record date of February 7, 2022, and a payment date of February 10, 2022.
You own 0.5 shares of Apple and purchased these in January 2022. To calculate your dividend, we multiply 0.5 shares by the dividend amount of $0.22. You will receive a dividend of $0.11 on February 10, 2022.
The ex-dividend date is February 4, 2022, one business day before the record date. In order to qualify for a dividend, you must have purchased Apple shares before February 4, 2022, and they need to have settled before or on February 7, 2022 (record date).
To learn more, check out our dedicated video on dividends in Flahmingo Central (you can access this right in the Flahmingo app)!
