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

Regarding the record date and ex-date for a cash dividend in the Indian equity market, which statement is correct?

The record date determines who is entitled to the dividend. Shareholders whose names appear in the company's records on that date receive it, while buyers on the ex-date are not entitled and the price typically adjusts downward.

  1. ABuyers on the ex-date are entitled to the dividend
  2. BThe ex-date is the date on which the company pays the dividend
  3. CThe record date determines which shareholders are entitled to the dividendCorrect
  4. DThe share price normally rises on the ex-date by the dividend amount

Explanation

Entitlement is decided by names in the depository records on the record date. The ex-date is when shares start trading without the dividend, so buyers on or after it are not entitled, and the price normally adjusts downward, not upward.

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