Are you ELIGIBLE for stock dividends?
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Imagine a stock announces its dividend on 20th May and will check its record of eligible shareholders on the 3rd of June, which is also known as the record date.
Remember, to receive this dividend, you should buy the stock before the ex-dividend date, which is usually 2 days before the record date, before 1st June in this case.
Knowing this, one of my friends became all enthusiastic and was like, oh I’ll buy the shares before 1st June, be eligible on 3rd June and sell the share right after that on 4th of June.
Wellll, bad idea. Because on the ex-dividend date, the share price will fall almost by the amount of the dividend keeping all other factors unchanged. So while you are eligible to receive the dividend, you are losing the share’s market price, Matlab turant bech ke faayde hone ke chances kam ho skte hai
So before you buy or sell a stock for its dividend, check the important dividend dates and how it may or may not make you a net profit.
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