MNOP Inc. declared a $1.00 dividend with a record date of Thursday, September 15, and a payment date of Thursday, October 20. Cheri does not want receive this current dividend. What is the earliest date that she should purchase the stock in order to avoid receiving the dividend?

Question

Quizplus · Accepted Answer

To avoid receiving the dividend, Cheri must purchase the stock on or after the ex-dividend date, which is one business day before the record date. Since the record date is September 15, the ex-dividend date would be September 14. Therefore, purchasing on September 13 means she would still receive the dividend, so the earliest she can purchase to avoid it is the day after the ex-dividend date, which is not listed. However, the closest correct option given is September 13, which is actually the last day she could purchase and still receive the dividend, indicating a misunderstanding in the explanation. To clarify, to avoid the dividend, she should purchase after the ex-dividend date, but since the options provided don't accurately reflect this scenario, the closest incorrect option was chosen based on the provided rationale. The correct approach would be to purchase on September 14 or later, but since this date is not an option and the question seems to be aiming at understanding of the ex-dividend concept, September 13 is mistakenly identified. The correct answer should reflect purchasing after the ex-dividend date to avoid the dividend, but given the options and the explanation's intent, there's a misinterpretation.

MNOP Inc Declared a $1