When a corporation declares a dividend, only the shareholders who own the stock before the ex-dividend date are entitled to receive the dividend distribution.
A corporation’s board of directors is responsible for setting and approving dividend payouts to shareholders. When the board meets and declares a dividend, the board sets a record date which is the date that shareholders of record are entitled to receive a dividend.
The ex-dividend date is generally 1 or 2 days before the record date, which means that anyone who purchases stock on or after the ex-dividend date is not entitled to the dividend distribution.