Question

Describe the terms announcement date, ex-rights date and record date by illustrating two cases of real world listed companies on NZSX. Also summarise your observations in four to six sentences .

Answer 1

Announcement Date- The announcement date is known as the date on which a company announces important details about a decision that has been taken or related to a stock.

Example- Co X announce dividend payable for its shares

Ex-Right Date- The date on which any right on a stock that has been declared, but not distributed, belongs legally to its seller rather than the buyer. That is, when one sells a stock on or after the ex-rights date, the right will remain with the seller when it is distributed.

Example- Dividend declaration date for Stock M is 15th Dec’20. A sells stock M to B on 17th Dec’20. A has right to receive dividend on Stock M

Record date: The record date is the cut-off date established by a company in order to determine which shareholders are eligible to receive a dividend or distribution.

Example- Company X declares that record date for Dividend payable on stock X is 15^th July’20. A sells his stock to B on 16^th July’20. Dividend payable by the client on 10^th Sept’20 will be received by A and not B even if B is the Stock owner on date of dividend distribution.