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Corporate Actions
Dividend
Definition
A cash distribution from a company to shareholders, usually paid semi-annually for ASX stocks. Most ASX dividends carry franking credits.
Related Terms
Franking Credits
Tax credits attached to Australian dividends representing corporate tax already paid. Recipients reduce their personal tax liability by the franking-credit amount. Short sellers must compensate lenders for any franking value missed on the loaned stock — a 'frank' or 'manufactured dividend' adjustment.
Ex-Dividend Date
The first trading day a stock trades without the right to its declared dividend. Buyers on or after this date do not receive the dividend. Stocks typically drop by the dividend amount on the ex-date, which short sellers must compensate lenders for.
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