Interval between key dates:
Except for the time between the ex-date and the record date, the time between the other pertinent dates is determined by each company and can vary substantially.
A. last day before the ex-dividend date
A. December 26th
Markets are closed on Christmas day, Monday (25th), and are not open on Saturday (24th) and Sunday (23rd).
On the ex-dividend date, the money value of the upcoming dividend should be subtracted from the previous day's closing price, because the shares no longer carry the right to the next dividend payment.
A. gets the right to a dividend and the market price recognizes the added value.
A. $2.00 immediately after the date of record
I. an efficient reaction to the loss in value
A. Payment date
A. dividend declaration
The date of a dividend announcement is called the dividend declaration date.
A. dividend declaration
The holder-of-record date is the date on which a share must be owned in order to receive a given dividend.
A. ex-dividend date
"The Board of Directors of WePay, Inc. has declared a regular quarterly dividend of $0.25 per share payable June 13, 2011 (a Wednesday) to all stockholders-of-record as of the close of business on May 17, 2011 (a Thursday)."
Assuming a three-day settlement for WePay stock and no holidays in the weeks surrounding the record and payment dates, determine the ex-dividend date.
A. Tuesday, May 15
With a three-day settlement, the ex-dividend date would be two days prior to the holder-of-record date, which would be Tuesday, May 15, 2011. If an investor bought WePay on Monday, May 14, 2011, they would settle for it on Thursday, May 17, 2011 and would be the holder-of-record at the close of trading on that date. Hence they would receive the dividend. Alternatively, if they bought it on Tuesday, May 15, 2011, they would settle on Friday, May 18, 2011, which is the day after the holder-of-record date. Hence they would not receive the dividend.
A. Holder-of-record date; Declaration date; Ex-dividend date; Payment date
Remember that stock transactions typically settle in three business days.
A. Monday, July 28
The ex-dividend date is the date on which investors are cut off from receiving a dividend. If for example, an investor purchases a stock on the ex-dividend date, that investor will not receive the dividend. This date is two business days before the holder-of-record date.
The ex-dividend date is important as, from this date and forward, new stockholders will not receive the dividend. As a result, the stock price of the company will be reflective of this. For example, on and after the ex-dividend date, a stock most likely trades at lower price, as the stock price is adjusted for the dividend that the new holder will not receive.
A. increases its debt to 80% of capital to maximize the level of earnings per share.
Stock prices tend to fall on the ex-dividend date, not on the pay date. While a stock repurchase is a positive signal to investors, a stock offering is a negative signal. While a higher debt level may maximize a company's earnings, that level is not likely to maximize the firmÔ??s price since it is likely to be associated with a higher level of risk.