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Davidson Interiors declared a dividend to holders of record on Thursday, October 15, that is payable on Monday, November 2. Suenette purchased 200 shares of Davidson Interiors stock on Monday, October 12, and Jake purchased 100 shares of this stock on the following day. Which one of the following statements is correct given this information?

a.Both Suenette and Jake will receive this dividend.
b.Suenette will receive the dividend but Jake will not.
c.Jake will receive the dividend but Suenette will not.
d.Neither Suenette nor Jake will receive this dividend.
e.You cannot determine who will or will not receive this dividend based on the information provided.

User Anatoly E
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7.6k points

1 Answer

5 votes

Final answer:

Both Suenette and Jake will receive the dividend from Davidson Interiors as they both purchased shares before the record date for the dividend.

Step-by-step explanation:

In stock trading, the date of record, also known as the record date, is the cut-off date established by a company in order to determine which shareholders are eligible to receive a dividend or distribution. In the scenario provided, Davidson Interiors declared a dividend to holders of record on Thursday, October 15, and it is payable on Monday, November 2. Based on the dates given, Suenette purchased 200 shares on Monday, October 12, which was before the record date, while Jake purchased 100 shares on Tuesday, October 13, also before the record date. Therefore, as long as they both hold their shares through the record date, they should both receive the dividend.

Dividends are a way for companies to distribute a percent of the profits to shareholders, with the amount each shareholder receives based directly on the number of shares owned. For companies with stable profits, like those offered by Coca-Cola and electric companies, dividends can provide a consistent income to shareholders who often hold on to these stocks for many years. Given the information, the correct statement is: a.Both Suenette and Jake will receive this dividend.

User Matthew Brent
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8.9k points
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