STC wrote:Say you hold the TSM through the Vanguard ETF VTI in one of your accounts. We have passed the ex-dividend date, but the payout has not occurred. If you had automatic dividend re-investment turned on, but sold all of the shares from that position today... what happens to the dividend? Do you end up re-creating the position? Or does the dividend get paid as cash since you no longer have VTI as a holding?
origami wrote:Does anybody have an experience with the situation or are all of you just guessing?
How will you sell if you end up having less than one share?
5. Does selling shares affect a distribution?
If you sell the entire stock position two days or more before the dividend-payable date, Your distribution will be paid in cash. If, however, You sell an entire position within the two day time frame of the security’s payable date, the dividend will be reinvested, resulting in additional shares. Selling these subsequent shares will require another sell order, which will incur additional commission charges. Dividends which would have been reinvested into less than one whole share will be automatically liquidated into cash.
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