The date a cash dividend becomes a binding legal obligation to a corporation is the?

The date a cash dividend becomes a binding legal obligation to a corporation is the?

A. payment date.

B. record date.

C. earnings date.

D. declaration date.

Answer: D. declaration date.

This is because cash dividend is the extent of the legal requirements or laws enforced on the corporation on the declaration date. It is the date on which the board of directors of a company go public and declares to the whole world that a particular corporation or a company will be distributing dividends to its shareholders. This pecuniary value is a declared dividend for shareholders and has some legal ground on which the company can distribute such an amount. The other options mentioned are also crucial strategic changes in dividend policy, but it is not the stage where the payment of the dividend is outright legalized in the firm. The record date is also known as the booking date and this is the date on which the company identifies the shareholders who would receive the dividend payment while the payment date refers to the date the actual payment of the dividend is done and the earning date refers to the date on which the company fails to release its earning which may include the declaration of the actual dividend.