Question

The __________ is the date the board of directors formally authorizes the payment of the dividend.

A) declaration date
B) record date
C) payment date
D) None of these choices are correct.

Answer 1

The date the board of directors authorizes the payment of the dividend is the declaration date, making option A correct.

Step-by-step explanation:

The declaration date is the date the board of directors formally authorizes the payment of the dividend.

Therefore, the correct option is A) declaration date.

When a company decides to issue a dividend to its shareholders, there is a process in place that includes several key dates.

This process begins with the declaration date, which is when the company's board of directors announces their intention to pay a dividend.

Following this, there is a record date, by which shareholders must be on record to receive the dividend.

Lastly, the payment date is when the dividend is actually paid out to shareholders.