‫ م‬12:15 2023/‫‏‬6/‫‏‬5 FINC2302 SECT 6, SEM2, 2022/2023-Abd'Al-Rahman Shah

Course: FINC2302 SECT 6, SEM2, 2022/2023

Student: Abd'Al-Rahman Shah
Book: Zutter/Smart: Principles of Managerial Finance, 16/e, Global
Instructor: Nor Azizan Che Imbi
Edition
Date: 6/5/23
Time: 12:14 PM

Bristol's Bistro,​Inc., has declared a dividend of ​$2.80 per share for shareholders of record on​Tuesday, December 3. The firm has 400,000
shares outstanding and will pay the dividend on December 28. How much cash will be needed to pay the​dividend? When will the stock begin
selling ex dividend​?

The amount of cash needed to pay the dividend is equal to the declared dividend per share times the number of shares​outstanding, as shown
in the following formula:

Cash needed to pay dividend​= ​$2.80 × 400,000 = ​$1,120,000.

The amount of cash needed to pay the dividend is ​$1,120,000.

The stock begins trading ex dividend one business day prior to record date. The record date is​Tuesday, December 3 and the stock will trade
ex dividend on​Monday, December 2.

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