How long must one hold common stock to qualify for dividends?

Prepare for the Enrolled Agent Exam. Use flashcards and multiple-choice questions with hints and explanations to master the material. Be exam-ready with confidence!

To qualify for dividends on common stock, an investor typically must hold the stock for a minimum period known as the "holding period." For most publicly traded companies, the standard requirement is to hold the stock for at least 60 days during the 121-day period that begins 60 days before the ex-dividend date. Holding the stock for 60 days ensures that the investor is recognized as a legitimate stakeholder who has an economic interest in the company, thereby entitling them to receive dividends.

In context, the other options do not align with this standard holding requirement. For example, 30 days may be too short to meet the expected duration for qualifying dividends, while 45 days and 90 days exceed the typical requirement. Thus, 60 days remains the most accurate reflection of the necessary holding period for common stock to qualify for dividend payments.

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