The dividend dilemma

Historically, when a company declares a dividend, new shares issued before the ex-date are not entitled to the dividend. These shares are traded as "A" shares until the ex-date, when they are merged with normal shares. — Reuters

DIVIDENDS – as investors in a public listed company, one of the investment thesis that attracts the investment public, is not only for a company to have a formal dividend policy, but one that pays to the legitimate shareholders of a company for the financial period ended in any given year.

Legally, as defined under Section 131(1) of the Companies Act, 2016, a company may only make a distribution to the shareholders out of profits of the company available if the company is solvent.