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10 June, 19:23

ABC Corporation announced that it would pay a dividend to all shareholders of record as of Monday, April 5, 2010. It takes three business days for the new owners of a share of stock to be registered. a. When was the ex-dividend day? b. When was the last day an investor could purchase ABC stock and still get the dividend payment?

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  1. 10 June, 20:13
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    Ex-dividend date is 1st April 2010

    The last day to purchase the share and still get the dividend proposed is 31st March 2010

    Explanation:

    The standard is that ex-dividend is two business days before the record date, giving a record date of April 5,2010 which is a Monday, it implies that the 4th Sunday and 3rd Saturday are not considered in the analysis.

    Hence the ex-dividend is Thursday 1st of April 2010, as a result, for any shareholder to be entitled to this dividend he or she must have purchased the share of ABC corporation by 31st March 2010, a day before the ex-dividend date.
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