Understanding Dividends and Key Dates

What is the primary purpose of cash dividends?

• To reduce company expenses

• To attract new investors

• To share profits with stockholders

• To increase the stock price

Which date determines when you must own shares to receive a dividend?

• Announcement date

• Payment date

• Declaration date

• Record date

What is the ex-dividend date?

• The date after which new buyers are not entitled to dividends

• The date dividends are paid

• The date the dividend is announced

• The date you must own shares to receive dividends

How might a stock's price change on the ex-dividend date?

• It may increase due to high demand

• It may decrease by the dividend amount

• It remains unchanged

• It may increase by the dividend amount

Why might buying shares before the ex-dividend date not always be more profitable?

• The record date might change

• Dividends are not guaranteed

• The stock price may drop by the dividend amount

• The company might cancel the dividend