Record date is the threshold date set by the management to know who the real shareholders of the company are. More like a survey done by the internal system to know whom to reward.
Record date definition may vary, it’s the day the investor is officially recorded as a shareholder of the company. Since stocks are actively traded every day in the stock market, the managements looks for the real holders on rewarding them which in a daily basis is implausible.
The stock record date for dividend plays a crucial role hierarchically next to the ex dividend date. Even though the stock is sold on the ex-dividend date, the traded piece gets out of the depository account which will be settled with the buyer after the record date.
As a matter of concern when a company pays 25% greater than the value of the company, a sort of rarity. Rec date will be the day succeeding the payable date.
Ex Dividend Date vs Record Date
According to the chronology of dividends (DERP) record date is the day after the ex dividend date. Record date is the day investor appears in the records of the company of whom all are eligible for the current dividend issue. This has nothing to do with the investor’s action.
What does the record date mean for dividends?
Record date is the day after the ex dividend day at which the investor comes under records of the firm on the occasion of a dividend issue.
Can a record date be on a weekend?
As no financial market works on weekends, the record date will be postponed to the next nearest working day i.e., Monday.
What is a record date for buybacks?
Record date for buy backs is to record the shares that are eligible to opt for a buyback, which should be bought before the record date. Those are the share can be asked for buybacks. Remember not all the shares can be asked for a buyback.