Trading, Accounts & Prohibited ActsQuestion 234 of 398
An investor buys stock ON the ex-dividend date. With respect to the upcoming dividend, what is the result?
a.The buyer receives the dividend because the purchase came first
b.The buyer and seller split the dividend equally
c.The company cancels the dividend for that quarter
d.The buyer is not entitled to the dividend; the seller keeps it
Explanation
Buying on or after the ex-dividend date means the trade will not settle in time for the buyer to be a holder of record, so the buyer is not entitled to the dividend. The seller, who owned the shares before the ex-date, keeps the upcoming dividend.
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