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NISM Certifications · NISM-Series-XV: Research Analyst · Corporate Actions

A company declares a cash dividend of ₹5 per share with a record date of Thursday. Under the T+1 settlement cycle, which statement about the ex-dividend date is correct?

Under T+1 settlement the ex-dividend date is the same day as the record date. Shares bought on that day settle after the record date, so the buyer does not receive the dividend, unlike the earlier T+2 cycle where ex-date came one day earlier.

  1. AThe ex-date is the same day as the record dateCorrect
  2. BThe ex-date is one trading day before the record date
  3. CThe ex-date is the declaration date
  4. DThe ex-date is one trading day after the record date

Explanation

Under T+1 settlement, a buyer on the day before the record date would get shares only after the record date, so the stock turns ex-dividend on the record date itself. Under the older T+2 cycle the ex-date was one day before the record date.

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