Cash Settlement Ex-Dates

The book is saying the ex-dividend date is the day PRIOR to the record date. The quiz is saying it is the day AFTER (see next two replies because I cannot embed more than one image apparently). I have been missing this question often and I am just getting more and more confused. TIA
Maybe I am missing something… is there a difference between the ex-DIVIDEND date and the CASH SETTLEMENT ex-date? If so can I please get an explanation haha


Hi @bradydayton! This can be a bit of a nitpicky topic, but I’m glad you brought it up. We get several questions on cash dividends and ex-dates, so this is a challenging area for most learners.

The key to this question is determining if the settlement is regular-way or cash. As discussed in the reading material, regular-way settlement occurs over two business days (T+2), while cash settlement occurs same day. This is the reason for the difference in answers. Here’s the material you’ll want to focus on:

Bottom line, this is when the ex-date occurs:

  • Regular-way settlement trades: business day prior to the record date
  • Cash settlement trades: business day after the record date

That’s what you need to know to correctly answer similar questions on this topic, but I can definitely provide more context if the concept still doesn’t make sense. Feel free to respond or DM me directly anytime. I hope this helps!

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Ahh yes. Got it! Thank you.

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