Lesson 5 of 6 · All lessons in this module
- Dividends, splits, buybacks and the payment timelineVideo lesson
- Why companies pay dividends, buy back, split or consolidate
- Reading the price change on the ex-dividend date
- Price return, total return and reinvested dividends
- Integrated cases: reinvested quarterly dividends, a split and the dividend calendar
- Today's price from expected dividends and a target price
This lesson is part of the 2027 curriculum. You are following the 2026 curriculum, where it is not taught in this form. Switch if you are sitting the exam under the 2027 curriculum.
Lesson 5 of 6 · 15 min
Integrated cases: reinvested quarterly dividends, a split and the dividend calendar
A holding-period return needs every price and dividend on one share basis; dividends received during the period earn their reinvestment return, either at a cash rate or in the stock, and the ex-date sits one business day before the record date when no settlement cycle is given.
In short
- Read the exhibit in time order: purchase, each dividend (and whether it is reinvested, at what rate or price), any split, and the final price.
- Dividends reinvested at a periodic cash rate: future value of each dividend at the period end, then add them to the price change.
- A split mid-holding: divide earlier prices and dividends by the split factor, then reinvest the split-adjusted dividend at the split-adjusted price.
- Check a multi-year answer by compounding the periodic total returns.
- With no settlement cycle given, the ex-date is one business day before the record date; a buyer on the ex-date does not get the dividend.
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