Are you entitled to the dividend?

On Nov 10, 2009, X declares a dividend payable on Dec 30, 2009 to its shareholders. X also announces that shareholders of record on the company’s books on or before Dec 1, 2009 are entitled to the dividend.

The stock would then go ex-dividend two business days before the record date.

In this example, the record date falls on a Tuesday. Excluding weekends and holidays, the ex-dividend is two business days before the record date – in this case, on the preceding Friday, Nov 27.

Anyone who bought the stock on Friday or after would not get the dividend (the dividend goes to the seller of the shares).

Those who purchase before the ex-dividend date receive the dividend.

Ex-dividend date is the date in which the stock price adjusts to reflect the next dividend payment. And, if you want the dividend payment, you have to buy the stock prior to the ex-dividend date.

Summary:
Declaration date: Nov 10, 2009
Ex-dividend date: Nov 27, 2009
Record date: Dec 1, 2009
Payable date: Dec 30, 2009

Source: The little book of Big Dividends – A safe formula for guaranteed returns (by Charles B. Carlson)