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If I own 15 shares of a stock that makes a cash dividend payment of 0.635/share for a total dividend payment of $9.525, who determines how the half-penny is handled?

I couldn't find any documentation regarding this situation

  • For my brokerage account;
  • From the issuing company (the issuing company usually states how fractional shares will be handled in a split/spinoff);
  • From FINRA (http://www.finra.org); and
  • I didn't even try to find an SEC rule.
Ben Miller
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Christopher Lewis
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1 Answers1

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I recently opened up a Robinhood account with a small amount of money. Due to their lack of commission fees I have been buying 1 share. They round the dividends up or down:

SCHZ paid a dividend of $.1286 per share. You were credited $0.13.

and

Number of shares 1  
Amount per share $0.0445
Total amount $0.04

I had one dividend that had the fractional penny equal to 5 and they rounded up, which was surprising since they will need to round up 50/100 times (given an odd number of shares), and round down only 49/100 times (not round at all 1/100), which seems to suggest they will lose money on the rounding. But I also received a dividend of 0.125 per share that they rounded down to $0.12 . So they may alternate rounding the 0.005 up or down in order to avoid gaining or losing money the rounding.

Scooter
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    the ...5 that was rounded up, was the resulting last digit even? Bankers' rounding means rounding to even, precisely to avoid the asymmetry you spotted. You'll note that 0.125 -> 0.12 is rounding to even. – AakashM May 01 '19 at 08:09
  • @AakashM I see a 0.045 that rounded to 0.05 . The only other "3rd digit is 5" dividend I have is 0.0257 -> 0.03. – Scooter May 02 '19 at 03:22