Appendix

The time line between the board’s decision to commit to a dividend payment and the final cash disbursement to the shareholders is characterized by specific dividend dates which are illustrated in Figure 8. Firstly, during the internal board of directors meeting management decides to pay out a dividend to the shareholders. Subsequently, at the dividend announcement date the board addresses the public and announces their dividend commitment as well as the size of the declared dividend. After the dividend announcement date the share is traded with the right to receive the upcoming dividend included. The ex-dividend date establishes the final point in time until after the right to receive the dividend expires. Two business days after the ex-dividend date, at the dividend record date, all shareholders who are entitled to the dividend have been recorded. Finally, about two weeks after the shareholder record date the dividend checks are mailed to all recorded shareholders at the dividend payment date.