A dividend is declared on January 1,has an ex-dividend date of January 20,and a record date of January 26.Which of the following shareholders will not receive the dividend?
A) A shareholder who purchases on December 31.
B) A shareholder who purchases on January 10.
C) A shareholder who purchases on January 19.
D) A shareholder who purchases on January 24.

Question

Quizplus · Accepted Answer

To receive the dividend, a shareholder must own the stock before the ex-dividend date. In this case, the ex-dividend date is January 20, so any shareholder who purchases on or after this date will not receive the dividend. Therefore, option D, a shareholder who purchases on January 24, will not receive the dividend. Option A, a shareholder who purchases on December 31, will receive the dividend because they own the stock prior to the ex-dividend date. Option B, a shareholder who purchases on January 10, will also receive the dividend because they own the stock prior to the ex-dividend date. Option C, a shareholder who purchases on January 19, will receive the dividend because they own the stock prior to the ex-dividend date.

A Dividend Is Declared on January 1,has an Ex-Dividend Date