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Template:Record amount paid amount ex amount: Difference between revisions
Template:Record amount paid amount ex amount (view source)
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Is {{eqderivprov|Paid Amount}} meant to be different from {{eqderivprov|Record Amount}} or {{eqderivprov|Ex Amount}}, in referencing not what is ''declared'', but what the {{eqderivprov|Issuer}} actually physically, real-world, ''paid'' out? | Is {{eqderivprov|Paid Amount}} meant to be different from {{eqderivprov|Record Amount}} or {{eqderivprov|Ex Amount}}, in referencing not what is ''declared'', but what the {{eqderivprov|Issuer}} actually physically, real-world, ''paid'' out? | ||
On one hand, on a natural reading it seems so: {{eqderivprov|Record Amount}} and {{eqderivprov|Ex Amount}} specify an amount by reference to the amount “declared by the {{eqderivprov|Issuer}} to [[holder of record|holders of record]] of a {{eqderivprov|Share}}”, whereas {{eqderivprov|Paid Amount}} references the amount “''paid'' by the {{eqderivprov|Issuer}} during the relevant {{eqderivprov|Dividend Period}} to [[holder of record|holders of record]]”. On the other hand there’s no sensible reason for supposing | On one hand, on a natural reading it seems so: {{eqderivprov|Record Amount}} and {{eqderivprov|Ex Amount}} specify an amount by reference to the amount “declared by the {{eqderivprov|Issuer}} to [[holder of record|holders of record]] of a {{eqderivprov|Share}}”, whereas {{eqderivprov|Paid Amount}} references the amount “''paid'' by the {{eqderivprov|Issuer}} during the relevant {{eqderivprov|Dividend Period}} to [[holder of record|holders of record]]”. On the other hand there’s no sensible reason for supposing an {{eqderivprov|Equity Amount Payer}} would want to keep the risk of solvency of an {{isdaprov|Issuer}} if it pays early<ref>or ever, really: that defeats the purpose of an equity derivative</ref> but ''not'' have it if it pays on the payment date. Examination of the world wide web seems to offer little help. | ||
But here’s a common-sense explanation: remember the timing of the dividend process: first it is declared, then, a short settlement cycle before the [[Record date|record date]] it trades ex-div (this is the [[ex date]]), then and two or three weeks after that is the actual {{eqderivprov|Dividend Payment Date}}. And remember this whole farrago is to determine ''in which Dividend Period'' you will receive cash settlement of your Dividend Amount. Now, if you chose {{eqderivprov|Ex Amount}}, your {{eqderivprov|Cash Settlement Payment Date}} may well fall ''before'' the actual {{eqderivprov|Dividend Payment Date}}, in which case ''it doesn’t make sense to talk about the dividend paid by the issuer, because it won’t have been paid yet''. If you selected {{eqderivprov|Paid Amount}}, the {{eqderivprov|Cash Settlement Payment Date}} necessarily will fall after the {{eqderivprov|Dividend Payment Date}}, so you needn't fret about it, however appealing that prospect may be. | |||
===[[Dividend clawback]]: if the {{eqderivprov|Issuer}} doesn’t actually pay a declared dividend=== | ===[[Dividend clawback]]: if the {{eqderivprov|Issuer}} doesn’t actually pay a declared dividend=== | ||