Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
The practice of buying a stock before the ex-dividend date and selling immediately thereafter. The ex-dividend date is the date after which a dividend belongs by right to the seller, rather than the buyer, of a stock. Thus, dividend capture allows the investor to keep the dividend after selling the stock. An investor practicing dividend capture is only interested in a stock for the dividend it produces and therefore sells the stock as soon as he/she can retain the dividend.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
The trading of a stock in order to be the holder of record for dividend payment purposes. Once the right to receive the dividend payment has been earned, the stock is sold. Dividend capture is practiced chiefly by corporations; they are permitted to exclude from their taxable income 80% of dividends received. Certain specific tax rules apply to dividend capture.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.