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. Flagon Transcontinental Corp.'s board of directors announced that it will pay a $1 million dividend in three months on this date. Declaration Date Holder-of-Record date Ex-Dividend Date Payment Date Flagon Transcontinental Corp. actually sent the dividend checks to stockholders on this date. Declaration Date Holder-of-Record date Ex-Dividend Date Payment Date Flagon 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. Declaration Date Holder-of-Record date Ex-Dividend Date Payment Date Flagon 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. Declaration Date Holder-of-Record date Ex-Dividend Date Payment Date Flagon

Answer 1

Flagon Transcontinental Corp.'s board of directors announced that it will pay a $1 million dividend in three months on this date - Declaration Date On the declaration date, the firm announces that it will pay dividends. If the company is large, it pays for a press release on a newspaper, or even, on TV.

Transcontinental Corp. actually sent the dividend checks to stockholders on this date - Payment Date.

Self-explanatory, this is the date on which checks are sent to shareholders who were recorded eligible for payment on the record-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 - Holder-of-Record date.

Also known as the record date, on this date, the firm determines which shareholders will receive the dividend.

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 - Ex-Dividend Date.

On this date, the value of the next dividend payment is substracted from the stock price. The Ex-Dividend Date is usually the day before the Record-Date, because shareholders that were found uneligible for dividend payment are now the holders of ex-dividend stocks.