ORIE 3150 October 14 2010 Notes Div Treas Stock ans

ORIE 3150 October 14 2010 Notes Div Treas Stock ans - ORIE...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ORIE 3150 Dividends and Treasury Stock There are three dates associated with a cash dividend. 1. Date of declaration. 2. The date of record. 3. The date of payment. Stock sold after the date of record is sold ex-dividend. Note that the settling date is now 3 days on the major USA stock exchanges. That is, when you buy stock in a corporation on a major exchange, you do not become a stockholder of record until three business days later! This used to be five days, now it is three. Arguably, with computers and communication systems the way they are today, it could be one day or less, but it is three days. You only get a dividend payment if you are a shareholder of record. Treasury stock is stock, either common or preferred, that has been issued and reacquired by the corporation, usually by buying the stock on the open market. Why is this done? 1. To get stock for employee stock plans. 2. Because the stock is undervalued. 3. Because the firm has excess cash that is cannot use wisely. Treasury stock is the last item (a deduction) in the stockholder’s equity section of the balance sheet.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern