Match each dividend milestone date associated with corporate actions to its correct defining characteristic.
- Declaration DateThe date on which the board of directors officially approves and announces the dividend payment.
- Ex-Dividend DateThe first date on which a buyer of a stock purchases shares without the right to receive the declared dividend.
- Record DateThe cutoff date set by the company to determine which registered shareholders are entitled to receive the dividend.
- Payable DateThe date on which dividend payment checks or electronic funds are disbursed to shareholders.
Answer
Declaration Date matches the date the board of directors officially approves and announces the dividend payment. Ex-Dividend Date matches the first date a buyer purchases stock without the right to receive the dividend. Record Date matches the cutoff date set by the company to determine registered shareholders entitled to the dividend. Payable Date matches the date dividend funds are disbursed.
Each milestone in the dividend process serves a distinct regulatory and financial role. The declaration date starts the timeline when announced by the board. Under regular-way settlement, the ex-dividend date is one business day prior to the record date; purchasing on or after the ex-dividend date means the trade settles after the record date, so the dividend stays with the seller. The record date fixes ownership eligibility on the company's books, and the payable date is when funds are disbursed.
Step-by-Step Solution
Key Concept
Corporate Action Dividend Milestones (DERP Sequence)