SIE Exam Question 329: Answer and Explanation

Question: 329

In order to receive a dividend, a shareholder must own stock as of the

• A. ex-dividend date.
• B. declaration date.
• C. payable date.
• D. record date.

Correct Answer: D

Explanation:

D - An investor must own stock as of the date of record in order to receive a dividend payment. To own stock by the record date, it must be purchased before the ex-dividend date which is 1 business day before the record date. By purchasing before the ex-date, there are two business days for settlement to occur, in accordance with regular way settlement process.