Series 7 practice questioneasyEquity Securities — Common Stock Dividends
A corporation's board of directors declares a cash dividend of $0.50 per share. On which date does the stock begin trading without the dividend?
- ADeclaration date
- BPayment date
- CRecord date
- DEx-dividend date✓ Correct answer
Explanation
Why D — Ex-dividend date
The ex-dividend date is the first business day on which a stock trades without the dividend. Investors who purchase shares on or after the ex-dividend date are not entitled to the declared dividend. The ex-date is typically one business day before the record date.
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