Cash Settlement Ex-Date

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However, you might see a question regarding cash settlement trades, which settle the same day. Remember, all that is required to receive the dividend is to be a settled owner on the record date. If an investor does a cash settlement trade on the record date, they’ll settle the same day and receive the dividend. Therefore, the ex-dividend date for a cash settlement transaction is the business day after the record date.

So with a cash settlement, DERP becomes DREP? Not sure I follow how that happens.

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Hi @Matthew! You’re right! However, it’s fairly unlikely you see a test question on cash settlement (although possible). If you can only remember one, DERP is the way to go.

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