What is the term for the date when the Board of Directors officially declares a dividend?

What is the term for the date when the Board of Directors officially declares a dividend?

• A. Ex-dividend date
• B. Record date
• C. Declaration date
• D. Payment date

Answer: (C)

The term for the date when the Board of Directors officially declares a dividend is known as the declaration date. This is a pivotal moment in the dividend distribution process, signifying the board's formal decision to distribute earnings to shareholders. On this date, the board also sets the amount of the dividend and the relevant dates for shareholders, such as the record date and payment date. Understanding the declaration date is essential because it impacts shareholders' expectations and the company’s stock price. Announcements made on the declaration date can influence investor interest and market sentiment regarding the company. The other terms in the question relate to different aspects of the dividend process: the ex-dividend date refers to the cutoff date for shareholders to qualify for the dividend, the record date is when a company identifies which shareholders are eligible to receive the dividend, and the payment date is when the dividend is actually paid out to shareholders.

The term for the date when the Board of Directors officially declares a dividend is known as the declaration date. This is a pivotal moment in the dividend distribution process, signifying the board's formal decision to distribute earnings to shareholders. On this date, the board also sets the amount of the dividend and the relevant dates for shareholders, such as the record date and payment date.

Understanding the declaration date is essential because it impacts shareholders' expectations and the company’s stock price. Announcements made on the declaration date can influence investor interest and market sentiment regarding the company.

The other terms in the question relate to different aspects of the dividend process: the ex-dividend date refers to the cutoff date for shareholders to qualify for the dividend, the record date is when a company identifies which shareholders are eligible to receive the dividend, and the payment date is when the dividend is actually paid out to shareholders.