Question
WXY Inc. declared a dividend on July 27, 2004 to be payable on September 10, 2004. The list of shareholders who would be entitled to
WXY Inc. declared a dividend on July 27, 2004 to be payable on September 10, 2004. The list of shareholders who would be entitled to this dividend would be prepared on August 10, 2004.
a) Identify the key dates involved with dividend payment (4 points)
b) If Tom bought some shares on August 7, 2004, would he have received the dividend declared for this period? If not, who would receive it? (3 points)
c) You buy a share of stock before the exdividend date for US$15. The dividend declared is US$1.50 per share. Ignoring the effect of taxes, does the value of your investment increase after the exdividend date? Does it decrease? Why? Why not? (3 points)
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