MNOP Inc. declared a $1.00 dividend with a record date of Thursday, September 15, and a payment date of Thursday, October 20. Cheri wants to purchase this stock and receive the dividend. What is the latest date that she needs to have purchased the stock in order to receive the dividend?

Question

Social Studies

Janelle Steele

10 September, 06:33

MNOP Inc. declared a $1.00 dividend with a record date of Thursday, September 15, and a payment date of Thursday, October 20. Cheri wants to purchase this stock and receive the dividend. What is the latest date that she needs to have purchased the stock in order to receive the dividend?

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Answers (1)

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Kelvin Blankenship · Answer 1

Tuesday, 13th September

Explanation:

The record date of the share as specified by the MNOP Inc. is fixed on Thursday, 15th September. So the ex-dividend date is on the 14th of September on Wednesday.

Ex dividend date is set by the company on the basis of stock exchange rules. Whether a stock holder will get the dividend or not will depend on the ex dividend date. Generally an ex dividend date is fixed one working day before the date of the record date. In order to get the dividend the buyer have to purchase the stock before the ex dividend date.

Thus in the context, Cheri should buy the stock at least one day before the ex dividend date of the stock that is on 13th September, Tuesday.