Book Closure date (also known as the record date or ex-dividend date) is the date that a shareholder must hold the stock to receive certain benefits (like share bonus issue, splits and dividend payments). When shares of a joint stock company invariably change hands during market trades, identifying the owner of some shares becomes difficult. So it is difficult to pass on certain benefits.
So, when a joint stock company declares dividends or bonus issues, there has to be a cut-off date for such benefits to be transferred to the shareholders. This date is termed as "Book Closure" date. It is the date after which the company will not handle any transfer of shares requests until the benefits are transferred. Only shareholders marked in the company's register at the Book Closure Date or the Record Date would be entitled to receive these benefits. In other words, shareholders that are on the company's records as on that date are eligible for these benefits.
If a company announces book closure as 1 January, shareholders who as on that day own the stock will be entitled to the dividend/bonus/split benefit. e.g. If Mr. Y buys this stock from Mr. X on 2 January, the benefit of bonus issue or splits or dividend will still be transferred to Mr. X by the company.
A company generally announces such a date along with the announcement of the bonus issue or splits or dividend announcement, as the case may be.
In an efficient market as per the efficient-market hypothesis (EMH) the effect of the price change due to bonus issue or splits or dividend as on the Book Closure date gets adjusted in the price of the stock in the market effective with the opening of the trade floor on the book closure date.
book, closure, this, article, does, cite, sources, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, news, newspapers, books, scholar, jstor, 2019, learn, when, remove, this, me. This article does not cite any sources Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Book closure news newspapers books scholar JSTOR May 2019 Learn how and when to remove this message Book Closure date also known as the record date or ex dividend date is the date that a shareholder must hold the stock to receive certain benefits like share bonus issue splits and dividend payments When shares of a joint stock company invariably change hands during market trades identifying the owner of some shares becomes difficult So it is difficult to pass on certain benefits So when a joint stock company declares dividends or bonus issues there has to be a cut off date for such benefits to be transferred to the shareholders This date is termed as Book Closure date It is the date after which the company will not handle any transfer of shares requests until the benefits are transferred Only shareholders marked in the company s register at the Book Closure Date or the Record Date would be entitled to receive these benefits In other words shareholders that are on the company s records as on that date are eligible for these benefits If a company announces book closure as 1 January shareholders who as on that day own the stock will be entitled to the dividend bonus split benefit e g If Mr Y buys this stock from Mr X on 2 January the benefit of bonus issue or splits or dividend will still be transferred to Mr X by the company A company generally announces such a date along with the announcement of the bonus issue or splits or dividend announcement as the case may be In an efficient market as per the efficient market hypothesis EMH the effect of the price change due to bonus issue or splits or dividend as on the Book Closure date gets adjusted in the price of the stock in the market effective with the opening of the trade floor on the book closure date See also editEx dividend date Retrieved from https en wikipedia org w index php title Book closure amp oldid 918678924, wikipedia, wiki, book, books, library,
