Question

ABC Corporation announced that it would pay a dividend to all shareholders of record as of​ Monday, April​ 5, 2010. It takes three business days for the new owners of a share of stock to be registered. a. When was the​ ex-dividend day? b. When was the last day an investor could purchase ABC stock and still get the dividend​ payment?

Answer 1

Answer:

Ex-dividend date is 1st April 2010

The last day to purchase the share and still get the dividend proposed is 31st March 2010

Explanation:

The standard is that ex-dividend is two business days before the record date,giving a record date of April 5,2010 which is a Monday,it implies that the 4th Sunday and 3rd Saturday are not considered in the analysis.

Hence the ex-dividend is Thursday 1st of April 2010,as a result,for any shareholder to be entitled to this dividend he or she must have purchased the share of ABC corporation by 31st  March 2010, a day before the ex-dividend date.