SIE (Securities Industry Essentials) Practice Exam

The correct sequence of dividend dates post-announcement is:

1. I, II, III, IV

2. I, IV, II, III

3. I, IV, III, II

4. I, III, IV, II

The correct answer is: I, IV, III, II

After a company declares that it will pay a dividend, there are four important dates to keep in mind for investors declaration date, ex-dividend date, record date, and payment date. The correct sequence of dividend dates would be I, IV, III, II. Option A is incorrect because it places the record date (III) before the ex-dividend date (IV). On the record date, the company checks its records to determine shareholders of record who are entitled to receive the dividend. However, to be a shareholder of record, the shares must have been purchased before the ex-dividend date. Option B is incorrect because it places the payment date (III) before the record date (IV). The payment date is when the dividend is actually paid to shareholders. However, the record date must come before the payment date in order for the company to determine who is eligible to receive the dividend. Option D is incorrect because it places the ex-dividend date (IV) after the payment date (III). On the ex-dividend date, the stock starts trading without the dividend payment included. In order for investors to receive the dividend, they must purchase the stock before the ex-dividend date. Overall