Out of all the words used in finance, perhaps one word holds more value for any single investor than all others: dividend. A dividend is a distribution of a portion of the earnings of a company to a specific class of shareholders. A company that sells shares of itself to the investing public organizes those shares into classes with defined rights and benefits. Dividends are rewards paid to investors for giving the company cash. Dividend payments are made by a company's board of directors arbitrarily. No guarantees exist that a company must continue to pay dividends or start paying them at all. Companies pay dividends on specific dates. Dividends are made via cash payments, share transfers or property transfers. Most dividends take the form of cash or shares. Rarely will a company transfer physical property to a shareholder in lieu of payment by shares or cash. Multiple dates are associated with dividends.Four actual dates are used in the dividend process. They are the declaration date, the ex-dividend date, the date of record and the date of payment. The process starts with the declaration date. On this date, the company declares its intent to pay a dividend to its shareholders. Next comes the ex-dividend date, when the company's share price is usually lowered to reflect the value of the paid dividend. An investor can purchase shares of a company one day prior to the ex-dividend date in order to receive a dividend. This is the second business day before the date of record. The company consults its records to determine who actually owns its shares on the date of record. An investor must be listed among the holders of record to receive any dividends from the company. Finally, the date of payment is when the company actually mails the dividend check to the shareholder. Dividends are usually calculated as dollars per share. The more shares a particular shareholder owns, the greater his dividend will be on the date of payment. For instance, if a company announces a dividend of $2.00 per share and a shareholder owns 100 shares, his total dividend will be $200.