When a company pays a dividend, it isn\'t as simple as getting a paycheck from o

Question

When a company pays a dividend, it isn't as simple as getting a paycheck from one's employer. There are several critical dates in the dividend payment process. Identify which critical dividend date relates to each of the statements. Declaration Holder-of-Record Ex-Dividend Statements Date Date Date Payment Date Flagon Transcontinental Corp.'s board of directors announced that it will pay a $1 million dividend in three months on this date. Flagon Transcontinental Corp actually sent the dividend checks to stockholders on this date. Flagon Transcontinental Corp.'s board of directors declared that whoever is listed as the owner of the stock on this date will receive the dividend for this year Flagon Transcontinental Corp.'s board of directors set this date as the date on which the right to the current dividend no longer accompanies the stock.

Explanation / Answer

1 statement:

Declaration Date:

The date on which the board of directors of a company announces the next dividend payment.

Here Flagon corp. announces next divedend payment date.

Hence that date is daclaration date.

2 statement:

Payment Date:

The payment date is the date on which corporate cash is actually paid to shareholder as a dividend. Depending on the medium through which you own your shares, dividends may be mailed to you as a check, wired into your bank account, or deposited into your brokerage account as cash.

Here Flagon corp has sent checks to its shareholrs.

Hence that date is Payment date.

3 statement:

Holder of record date:

The record date is the date on which company management looks at their shareholder records to see who is eligible to receive the company’s future dividend payment.

Here Flagon corp listed who are eligible to gat dividend.

Hence that date is Record date.

3 statement:

Ex-Dividend date:

The ex-dividend date for stocks is usually set one business day before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

Here Flagon corp declared the date from which no dividend will be payable.

Hence that date is Ex dividend date.

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