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WAEC Commerce 1991 (August) Question 23

Question 23

Stock Exchange

When shares are sold Ex-div it means that the

  1. A.buyer is entitled to any dividend which may be declared
  2. B.shares are sold at per
  3. C.shares are sold at a premium
  4. D.seller has the right to the next dividend
  5. E.shares are sold at a loss
Show the answer and explanation

Answer: D (seller has the right to the next dividend)

Explanation

Ex-dividend means 'without dividend': the buyer does not get the coming dividend, the seller keeps it.