Future Business Leaders of America (FBLA) Securities and Investments Practice Test

What does the payable date indicate?

1. The date when shares are authorized

2. The date dividends are paid to investors

3. The date dividends are calculated

4. The date a stock transaction is settled

The correct answer is: The date dividends are paid to investors

The payable date specifically refers to the date when a company pays dividends to its shareholders. It signifies the point in time at which shareholders on record will receive their dividend payment. If an investor owns shares of a company on or before the payable date, they are entitled to receive the declared dividends, which can be an important factor for investors seeking income from their investments. The other options relate to different aspects of stock and dividend processes. While the date when shares are authorized pertains to the establishment of stock capital for a company, the date dividends are calculated involves determining the amount to be paid based on company performance and other factors. On the other hand, the settlement date refers to when a completed stock transaction is finalized, and ownership is transferred from the seller to the buyer. Each of these dates serves a unique purpose in the investment ecosystem, but the payable date is explicitly linked to the actual distribution of dividends to shareholders.