ABC Corp. common shares are currently trading at $50. The company has announced a cash dividend of $1.00 per share, with an ex-dividend date of July 15th. An investor buys ABC Corp. shares on July 14th. What is this investor's entitlement regarding the dividend?

Question: ABC Corp. common shares are currently trading at $50. The company has announced a cash dividend of $1.00 per share, with an ex-dividend date of July 15th. An investor buys ABC Corp. shares on July 14th. What is this investor's entitlement regarding the dividend?

Answer options: ✅ The investor will receive the dividend.

• The investor will not receive the dividend as they bought too close to the ex-dividend date.
• The investor will receive half of the dividend since they bought one day before the ex-dividend date.
• The investor will receive the dividend only if they hold the shares for a full month after the ex-dividend date.

Correct answer: The investor will receive the dividend.

Explanation: To receive the dividend, an investor must purchase the stock before the ex-dividend date. Buying on July 14th means the investor is a shareholder of record and is entitled to the dividend.