The board of directors of DDT Inc. declared a dividend of $0.75 per share payable on Monday, January 28 to shareholders of record as of Monday, January 14. You owned 500 shares of DDT on
Wednesday, January 9 when the price was $7.50 per share. Under TSX rules and assuming no
Taxes and perfect markets, if you sell your 500 shares of DDT on Friday, January 11, what price will
You receive, all else the same?

Question

Quizplus · Accepted Answer

The ex-dividend date for DDT will be Tuesday, January 15 since it is two business days after the record date. Therefore, if you sell your shares on Friday, January 11, you will still receive the dividend. The total dividend amount you will receive is $0.75 x 500 = $375. The sale price of your shares would be the market price minus the dividend amount, so it would be $7.50 - $0.75 = $6.75 per share. The total amount you would receive from selling your shares would be $6.75 x 500 = $3,375.

The Board of Directors of DDT Inc