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A company declared a dividend on Tuesday, August 27th. The stock will go ex-dividend on Thursday,...

A company declared a dividend on Tuesday, August 27th. The stock will go ex-dividend on Thursday, September 12th, and the record date is Monday, September 16th. Finally, the payment date will be Thursday, October 17th. What is the latest day you can purchase the stock and still receive the dividend? Why? (1-3 sentences)

Solutions

Expert Solution

Latest date for buying stock for receiving dividends is Wednesday, September 11th. i.e. one day before ex-dividend date.

Explanation:

Declaration Date (Tuesday, August 27th)- The declaration date is the date when a company's board of directors announces a distribution of dividends.

Ex-dividend date(Thursday, September 12th): If you buy stocks one day before the ex-dividend, you will get the dividend. If you buy on the ex-dividend date or any day after, you won't get the dividend. You have to buy shares before ex-dividend date to get delivery by the record date to be eligible for dividends.

Record Date(Monday, September 16th) - The record date is the date when the company looks to see who are on the list of shareholders to whom dividends are to be paid.

Payment Date (Thursday, October 17th)- The payment date is the date when dividend is actually credited to investor accounts.

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ekkarill92 answered 2 years ago
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