Final answer:
The declaration date is when a company's board of directors announces the upcoming payment of a dividend to its shareholders.
Step-by-step explanation:
The declaration date refers to the date on which a company's board of directors announces the upcoming payment of a dividend or distribution to its shareholders. This declaration includes the amount of the dividend, as well as the record date and payment date, which are important dates in the dividend payment process.
For example, if a company declares a dividend of $1 per share on January 1st, the declaration date would be January 1st. The record date would typically be a few weeks later, and it determines which shareholders are eligible to receive the dividend. Finally, the payment date is when the dividend is actually paid to the eligible shareholders.