The difference between the date of record and the ex-dividend date from the perspective of the shareholder

According to NASDAQ, the date of record and the ex-dividend date determine which investors will receive dividends. The record date is a specific date set to determine which shareholders are eligible recipients of dividends. Normally, the record date comes two days after the ex-dividend date. The ex-dividend date (or the ex-date) is the day a stock trades without the benefit of the next scheduled dividend payment. An investor who buys stock on or after the ex-dividend date is not eligible to receive dividends for that particular period. Other important dates to investors include the declaration date and payout date.

What expected return and variance have to do with corporate finance

Expected return and variable are essential concepts in corporate finance. Investors use them to analyze the possible risks and returns of investment opportunities. According to Corporate Finance Institute, the expected return is the average return investors expect to receive from a given investment opportunity over a period of time. It is simply a measure of probabilities meant to demonstrate the possibility that an investment will produce a positive return.

On the other hand, variance refers to the volatility of investment returns around the anticipated returns. It shows the degree to which the actual returns deviate from the forecasted returns. Investors use variance to determine the risk level associated with different investment options.

Why profit maximization is not the appropriate goal for a corporation

In classical economic theory, profit maximization was considered the core goal of an organization. However, in today’s business setting, profit maximization is perceived as a narrow or inadequate objective for various reasons. Focusing mainly on growing profits in the short term may affect the long-term sustainability goals of the corporation. Some investments, such as customer satisfaction and employee training, may need costs that reduce the short-term income. However, these investments significantly affect the company’s long-term success, and an organization that focuses solely on profit maximization may sacrifice them to reduce expenses. Besides, focusing only on profit maximization may disregard the interests of other stakeholders, like customers, suppliers, and communities. Setting profit growth as the only goal may lead to unethical decisions or practices that could detriment the organization’s reputation and public image.
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