Question

On Monday, February 23rd, the shareholders of record will receive a dividend from FMD Company. On what date in February will the shares start trading ex-dividend? (No holidays in February)

1. Monday February 23rd

2. Friday February 20th

3. Thursday February 19th

4. Thursday February 26th

Answer 1

To determine the date when the shares will start trading ex-dividend, we need to consider the settlement period typically used for stock trades. In most cases, the ex-dividend date is usually set two business days before the record date. Since there are no holidays in February according to the question, we can work backward from the record date to find the ex-dividend date.

The record date is Monday, February 23rd. Counting two business days back, we arrive at:

Option 3: Thursday, February 19th.

Therefore, the shares will start trading ex-dividend on Thursday, February 19th.