Final answer:
The date that defines the eligible shareholders for a declared dividend is known as the date of record. This date is used by the company to determine who will receive the dividend, and it is different from the ex-dividend date, which is typically set one day before the date of record. Option 3 is correct.
Step-by-step explanation:
The date that establishes those individuals entitled to a declared dividend is called the date of record. When a company declares a dividend, it sets three important dates: the declaration date, the ex-dividend date, and the date of record or record date.
The date of record is the cut-off date established by a company in order to determine which shareholders are eligible to receive a dividend or distribution. The shareholders who own the stock on the date of record will be entitled to receive the dividend.
It's important to note that the ex-dividend date is typically set one business day before the date of record. If you purchase the stock on or after the ex-dividend date, you will not be eligible for the declared dividend.
The date that establishes those individuals entitled to a declared dividend is called the date of record. This is the date on which the company determines the shareholders who will receive the dividend payment. It is important for investors to be on the record as shareholders on the date of record in order to be eligible for the dividend.
For example, if a company declares a dividend on March 1st with a date of record of March 15th, only shareholders who are on the company's record as of March 15th will receive the dividend.
Other options, such as the ex-dividend date and closing date, are not directly related to determining dividend eligibility.