Dividends
Chapters in this video
- 0:00 Why dividends are never guaranteed
- 1:24 The 60-day qualified dividend holding rule
- 2:09 Cash vs stock dividends and Carl's pizza
- 3:36 Why stock dividends aren't taxed on receipt
- 4:02 DERP and who sets the ex-dividend date
- 5:00 T+1 settlement and the ex-date price drop
- 5:53 Rapid-fire exam recap
What this video covers
- Why dividends are never guaranteed and who actually has the authority to declare them
- The 60-day holding requirement inside the 121-day window around the ex-date that turns a cash dividend into a qualified dividend taxed at 0%, 15%, or 20%
- Why stock dividends are NOT taxable on receipt, and how they spread the same total cost basis across more shares without changing proportional ownership
- The DERP timeline (Declaration, Ex-dividend, Record, Payment) and the trap that the exchange (not the board) sets the ex-dividend date
- How T+1 settlement (effective May 28, 2024) made the ex-dividend date the same business day as the record date
- Why you must buy before the ex-date to receive the dividend, and what happens if you buy on or after
- Why the stock price opens lower by roughly the dividend amount on the ex-date, and what that says about chasing dividends
Read the full lesson, free
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