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Companies share profits with stockholders through cash dividends, which are deposited into shareholders' accounts. However, owning a stock on the dividend payment day does not guarantee receipt of the dividend. The declaration date, ex-dividend date, and payment date are key dates to understand. The declaration date is when the board of directors announces the dividend amount per share. Shareholders have time to buy shares before the ex-dividend date to receive the dividend. Understanding these dates is crucial when investing in dividend stocks.