Definition§
A Stockholder of Record is a common or preferred stockholder whose name is registered on the books of a corporation as owning shares as of a particular date. This particular date is known as the record date. Dividends and other distributions are made only to shareholders who hold the status of record as of this date.
Examples§
- Dividend Payment: On March 1st, ABC Corporation announces a dividend payment. Shareholders who are listed as stockholders of record by March 15th will receive the dividend on March 25th.
- Voting Rights: XYZ Inc. sets January 10th as the record date for its annual shareholder meeting. Only those shareholders who are stockholders of record by that date will have the right to vote.
- Stock Split: DEF Corp. announces a 2-for-1 stock split, effective to stockholders of record as of April 5th. If you own 100 shares by April 5th, you will receive an additional 100 shares.
Frequently Asked Questions (FAQs)§
Who determines the record date?§
The record date is determined by the corporation’s board of directors.
How is the record date different from the ex-dividend date?§
The record date is the cut-off date for determining which shareholders are entitled to a dividend, while the ex-dividend date is typically set one business day before the record date. If you purchase a stock on or after the ex-dividend date, you will not receive the next dividend.
Can stockholder of record status change?§
Yes, stockholder of record status can change through buying or selling shares. It’s important that your transaction completes before the record date if you want to be recognized as a stockholder of record.
What is the significance of the record date in corporate actions?§
The record date helps in identifying the shareholders entitled to receive dividends, participate in shareholder meetings, vote on corporate matters, and partake in other corporate actions like splits or buybacks.
Related Terms§
- Ex-Dividend Date: The date on which the stock begins trading without the value of its next dividend payment.
- Record Date: The cut-off date established by a company to determine which shareholders are eligible to receive a dividend or participate in a corporate action.
- Dividend: A distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders.
- Preferred Stock: A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock.
- Common Stock: A security that represents ownership in a corporation, with voting rights, and the claim on residual earnings.
Online References§
Suggested Books for Further Studies§
- “The Intelligent Investor” by Benjamin Graham
- “Common Stocks and Uncommon Profits” by Philip Fisher
- “Security Analysis” by Benjamin Graham and David Dodd
- “One Up On Wall Street” by Peter Lynch
Fundamentals of Stockholder of Record: Corporate Finance Basics Quiz§
Thank you for exploring the concept of the stockholder of record with us and attempting our sample exam quiz questions. Continue to enrich your knowledge in corporate finance!
