FINC5001_apital Markets Corporate Finance_2009 Semester 1_Week 12 FINC 5001 Tutorial Solutions.docVIP

FINC 5001 Capital Markets and Corporate Finance Tutorial Questions and Solutions Week 12 – Dividend Policy DQ 3 Briefly outline the typical dividend payment process and define the following terms: (a) Cum-dividend price. (b) Ex-dividend date. (c) Books close date. Answer Dividends are usually paid in the form of cash. Depending on the company’s Articles of Association, the final dividend may require approval of the shareholders at the AGM. Management usually decides on interim dividends. (a) Once a dividend is declared the stock trades ‘cum-dividend’; i.e. with the dividend attached. The sh