This module is part of the 2027 curriculum. You are following the 2026 curriculum, where it is not taught in this form. Switch if you are sitting the exam under the 2027 curriculum.
Lesson 1 of 5 · 12 min
Dividends, splits, buybacks and the payment timeline
Only cash distributions change what shareholders receive: stock dividends and splits just cut the same pie into more slices, a buyback is equivalent to a cash dividend, and a share stops carrying the dividend on its ex-date.
In short
- Regular cash dividends are paid at known intervals; extra (special) dividends are one-offs or top-ups.
- Stock dividends, stock splits and reverse stock splits change the share count and price per share but not the value of the company or anyone's ownership share.
- A share repurchase is an alternative to a cash dividend and, all else equal, has the same effect on shareholder wealth.
- Chronology: declaration date → ex-dividend date → holder-of-record date → payment date.
- On the ex-dividend date the share price falls by roughly the dividend, because new buyers no longer get it.
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