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ABC Corporation has declared a dividend of $1 per share. The company has set the ex-dividend date as March 15, the record date as March 20, and the dividend payment date as March 25. What does the ex-dividend date signify?a.The date on which the dividend is paid to shareholders.b.The date on which the dividend announcement is made to the public.c.The date on which new investors can purchase shares and still be eligible to receive the dividend.d.The date on which shareholders must be on record to receive the dividend.

Question

ABC Corporation has declared a dividend of $1 per share. The company has set the ex-dividend date as March 15, the record date as March 20, and the dividend payment date as March 25. What does the ex-dividend date signify?a.The date on which the dividend is paid to shareholders.b.The date on which the dividend announcement is made to the public.c.The date on which new investors can purchase shares and still be eligible to receive the dividend.d.The date on which shareholders must be on record to receive the dividend.

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Solution

The ex-dividend date signifies c. The date on which new investors can purchase shares and still be eligible to receive the dividend. After this date, any new shareholders will not receive the dividend, as the company has already finalized its list of shareholders to whom it will pay the dividend.

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