The cut-off date for receiving the dividend is known as the: A) ex-dividend date. B) holder of record date. C) date of payment. Correct answer is A) But why do i receive the dividend on the ex-dividend date? I thought the ex-dividend date is the date the stock trades without the dividend…i don’t get it…
that is the date after which dividend will not be paid. 2 days after that they compile the list of all folks who are eligible to receive the dividend - the Holder of Record date. DEHP -> Declaration Date->Ex Dividend Date->Holder of Record Date->Payment Date.
i swear there was something in schweser somewhere (and i maybe going nuts) saying the last day to receive the dividend was the day before the ex dividend date, 3 days before the holder of record date
To get the div you must be the holder of record on “holder date”. The be the holder of record on that date you need to buy the stock the day before ex date (due to standard T+3 settlement). So you will need to have your BUY order filled on the day before ex to show up on the books to receive the div.
I always think of it as that you will need to wake up owning the stock on the ex-div date in order to receive that divided.
i remember reading it too…that it is 1 day prior to ex div date.
smileygladhands Wrote: ------------------------------------------------------- > i swear there was something in schweser somewhere > (and i maybe going nuts) saying the last day to > receive the dividend was the day before the ex > dividend date, 3 days before the holder of record > date Secret Sauce? I read that too but Schweser is wrong. Think about it this way: If you could receive the dividend by buying on the Record of Holder Date you would be buying the stock after it has already started trading without the divi. So you would receive the dividend without it decreasing RE. Obviously the market is smarter than that and will not let you collect free money. There’s no free lunch with dividends.
smileygladhands Wrote: ------------------------------------------------------- > i swear there was something in schweser somewhere > (and i maybe going nuts) saying the last day to > receive the dividend was the day before the ex > dividend date, 3 days before the holder of record > date you are right, guess it it is a badly framed question. if I invest on ex div date, I wouldnt get any div…, as the last transaction date for div would be 1 day prior. And then T+3 days would be the holder of record date or 2 days from ex div date