Chapter 13.5

Question 1

Declaration Date

Answer 1

The date on which a dividend is declared by the board of the directors.

Question 2

Ex-Dividend Date

Answer 2

The date on which the stock begins to trade without the dividend, therefore a buyer of the stock would not be entitled to the dividend if the stock was purchased on or after the ex-date. It is normally the business day before the record date. The ex-date is determined by the exchanges for listed stock and by FINRA for OTC stock, not by the Board of directors.

**Exception: The ex-date for “cash” transactions is the business day after the record date.

Question 3

Record Date

Answer 3

The date on which the corporation closes the updating of the stock record book. Persons whose names appear on the book as of this date will be sent the dividend.

Question 4

Payable Date

Answer 4

The date that the dividend is actually paid.

Question 5

To be entitled to the dividend, you must own the stock when?

Answer 5

At least 1 business day before the Ex-Date

Question 6

Due Bill

Answer 6

• Promise to pay a distribution of cash, rights, or securities
• When a security is sold before the ex-dividend date but delivered too late for transfer on or before the record date, a due bill must accompany delivery.