ABC Corporation's board of directors declared a $$0\mathrm{.}25$ per share dividend on Wednesday, June $15.$ The dividend will be paid to shareholders of record on Tuesday, July $5.$ The dividend will be sent to shareholders on Tuesday, July $26.$ What is the last day to purchase the stock and receive the dividend, assuming a regular way settlement?

A$)$ July $1$

B$)$ June $30$

C$)$ July $2$

D$)$ July $3$

Explanation

This is a potent example of a difficult question that requires you to slow down and think it through. The ex$-$date for a corporation will be one business day prior to the record date. The record date is July $5.$ The day before is July $4,$ which is a holiday and not a business day. The days before that are Sunday and Saturday. The first business day before the ex$-$date is Friday, July $1.$ The last day to purchase the stock and qualify for the dividend is the day before the ex$-$date $($July $1).$ The only holidays we have heard of appearing on the exam are July $4$ and December $25.$

Regular way settlement as of May $282024$ is T$+1$ why is the answer $1$ business day before the record date, wouldnt that be ex dividend date? Shouldnt the answer be June $30$th$?$

LO $2.$b