AFB Corp.Declared a $1.00 dividend on January 5^th,with an ex-dividend date of January 19^th,a record date of January 21^st,and a payment date of March 15^th.Doug purchased AFB stock on January 6^th. A)Doug will not receive the dividend because he purchased the stock after the declaration date. B)Doug will not receive the dividend because he purchased the stock prior to the record date. C)Doug will receive the dividend if he still sells his stock on January 20th because he owned the stock on the ex-dividend date. D)Doug will receive the dividend if he still owns the stock on January 21st,even if he sells the stock before the payment date.

Question

Quizplus · Accepted Answer

The ex-dividend date is the date on or after which a stock buyer is not entitled to a declared dividend. Since Doug purchased the stock on January 6th, which was after the declaration date but before the ex-dividend date, he is entitled to receive the dividend as long as he still owns the stock on the record date (January 21st) even if he sells the stock before the payment date. Therefore, option D is correct.

AFB CorpDeclared a $1