A cash dividend represents a distribution of a company’s earnings directly to its shareholders, typically credited to the account where the underlying shares are held. This transaction occurs on the payment date, after the deduction of any relevant dividend taxes.

While cash dividends are disbursed in the form of a monetary amount, companies may also distribute dividends in the form of additional shares, known as stock dividends, which are delivered on the same pay date.

For CFDs, stock dividends are allocated to your account on the pay date. For short CFD positions, however, the client will be debited the equivalent amount of the dividend.