Trading, Accounts & Prohibited ActsQuestion 185 of 398
A company sets Wednesday as its dividend record date. Under T+1 regular-way settlement, what is the last day an investor can buy the stock regular way and still be entitled to the dividend?
a.Wednesday (the record date)
b.Thursday
c.Tuesday
d.Monday
Explanation
To be a holder of record on Wednesday, the trade must settle by Wednesday. Under T+1, a purchase made on Tuesday settles Wednesday, so Tuesday is the last day to buy and receive the dividend; Wednesday is the ex-dividend date.
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