Tuesday, September 22, 2009
Distribution Dates
When a preferred stock is called and the call date matches a distribution date for example, call date is 8/1/2014 and one of the four distribution dates is 8/1, do you receive that very last 8/1/2014 payment?
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Hello Roger-
Thanks for your post.
Generally, if the call date is listed as the same date as the distribution date, you will receive that last distribution in the event that the issuing company exercises the call on the call date.
Remember, the payment date is just the date that the issuing company intends on issuing the dividend payment to shareholders. The point in time when the issuing company must commit to paying the upcoming dividend (the declaration date), including the dividend payment that falls on the call date, arrives well before the call date itself.
While I suppose there can be exceptions, most preferred stocks have a five year life span (IPO date to call date) and pay quarterly dividends. So investors can count on at least 20 dividend payments.
Thanks again Roger.
Many Happy Returns.
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