Series 7 Exam Question 154: Answer and Explanation

Question: 154

Melste Corp. has just announced a 20-cent dividend to shareholders of record. If the record date is Friday, April 12th, when is the first day an investor can purchase the stock and not receive the dividend?

• A. Wednesday, April 10th
• B. Thursday, April 11th
• C. Friday, April 12th
• D. Monday, April 15th

Correct Answer: B

Explanation:

B. The first day the stock trades without the dividend is on the ex-dividend date. The ex-dividend date is one business day before the record date. In this case, the answer is Thursday, April 11.