T+1 chapter exam question

To receive the dividend, an investor must purchase the stock by February 13 by regular-way settlement (correct answer on chapter quiz)

"On Wednesday, January 8, 2021, Harley Technologies Inc. announced that its Board of Directors declared
a quarterly cash dividend of $0.55 per share of common stock. The dividend will be payable Wednesday,
March 3. 2021 to shareholders of record as of Wednesday. February 15. 2021.

Wouldn’t it be by February 14th ? Or it has to be settled before record date ?

(I’m tired ) LOL


Hi, good question! The settlement time recently changed from T+2 to T+1, which I think adds to the confusion here.

This is the key information: the record date is Feb 15th. Trades must be settled before the record date to receive the dividend. Therefore, the trade must be placed on Feb 14th for the new investor to receive the dividend.

We’ve updated our materials to account for the T+2 to T+1 change. However, if you’re reviewing an old practice exam, you’ll see the old questions/explanations/answers to preserve the scoring integrity of that exam.

We’ve done multiple rounds of QA during the update process, but it is possible that this question slipped through the cracks. Could you please use the feedback icon in the top right of the quiz screen :email: so we can look up the specific version of the question to ensure it’s been updated?