How companys pay dividends on their stocks?

Questions:

Does every company pay dividends on their stocks every 3 months?
Do I have to have the stocks on hold for atleast 3 months to receive dividends?
What If I buy a company’s stock a day before the company starts giving dividends will I get it then?
And, what If the prices of my stocks fall will i still receive dividends?


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One Response to “How companys pay dividends on their stocks?”

  1. nicedoc says:

    By convention most pay them quarterly but they can choose to pay them in any schedule they want. I have a stock for example that gives out dividends every month.

    Dividends are paid to shareholders who own the stock at the ex-dividend date (usually about a month before the payout date). If purchase the stock after the ex-dividend date, you won’t get the dividend for that period. Conversely, if you own the stock at the time of the ex-dividend date but sell it afterwards but before the payout date, you will still get the dividend.

    The dividend is not affected by the share price though a drop in share price may indicate financial troubles that could put future dividends at risk. That’s why you should be cautious about company’s with fat dividend payouts (e.g. 7% or more) since, rather than being a bargain, it more likely means a dividend cut is in the near future.