Trading & MarketsQuestion 87 of 125
The ex-dividend date is significant because an investor who buys the stock on or after that date:
a.Receives a double dividend
b.Must pay the dividend to the seller
c.Is not entitled to the upcoming declared dividend
d.Automatically reinvests the dividend
Explanation
The ex-dividend date is the cutoff for dividend eligibility; buyers on or after this date are not entitled to the declared dividend, which goes to the seller. To account for the payout, the stock's opening price is typically reduced by the dividend amount on the ex-date.
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