SIE practice questioneasyRecord Date vs Ex-Date
The record date for a dividend is the date on which:
- AThe company's board of directors declares the dividend
- BThe company determines which shareholders are eligible to receive the dividend✓ Correct answer
- CThe stock begins trading without the dividend
- DThe dividend is paid to shareholders
Explanation
Why B — The company determines which shareholders are eligible to receive the dividend
The record date is when the company checks its books to determine which shareholders are registered owners and eligible to receive the dividend. The declaration date is when the board announces the dividend. The payment date is when the dividend is distributed. Under T+1 settlement, the ex-dividend date is generally one business day before the record date.
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