How does the ex-dividend date differ from the date of record?
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How does the ex-dividend date differ from the date of record? |
Here is a tip:
Dividends are declared on the outstanding shares by the board of the company at a specified rate for each share.
Explanation
The ex-dividend date is important because it is the date on which the buyer of any new shares of the company will not get any rights to the dividends declared.
The date of record is significant because only those shareholders holding the shares (that has dividend rights) on the date of record will receive the dividends.
Verified Answer
Ex-dividend date will be the date on which the company will restrict the sale of its shares in the market with attached dividends.
Date of record is the date on which the date of payment will be announced which takes place after the ex-dividend date.
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