When shares are sold EX-D1V, it means that
When shares are sold EX-D1V, it means that
- A) No dividend is paid on the shares
- B) The buyer receive the dividend
- C) The seller receive the dividend
- D) The stock exchange receives the dividend
Correct Answer: C) The seller receive the dividend
Explanation
When shares are sold EX-D1V, it means that the seller of the shares will receive the dividend. This is the correct answer, which is option C.To understand this concept better, let's break it down. When a company makes a profit, it may decide to distribute a portion of that profit to its shareholders, which are the owners of the company. This distribution is called a dividend. Dividends are typically paid out on a regular basis, such as quarterly or annually.
Now, when shares are sold EX-D1V, it means that the shares are being sold without the entitlement to the upcoming dividend payment. In other words, if you buy shares that are EX-D1V, you will not receive the dividend that is due to be paid out. Instead, the seller of the shares will receive the dividend.
This is an important concept for investors to understand because the price of a share can be influenced by whether it is EX-D1V or not. If a share is EX-D1V, it may be priced lower because the buyer will not receive the upcoming dividend payment. On the other hand, if a share is not EX-D1V, it may be priced higher because the buyer will receive the dividend.
So, in summary, when shares are sold EX-D1V, it means that the seller will receive the dividend. This is an important consideration for investors when buying and selling shares.