Your client purchased 1,000 shares of ABC Corporation on the declaration date and sold 500 shares on the ex-date. He is entitled to receive dividends on how many shares of stock?

The correct understanding of dividends and the timing of ownership is key in this scenario. When a shareholder purchases shares on the declaration date, they are entitled to receive dividends for those shares. However, the critical moment to consider for dividend entitlement is the record date, not just the declaration date or the ex-dividend date.

In this case, the investor bought 1,000 shares on the declaration date, which means he became the official owner of those shares before the record date. When selling 500 shares on the ex-date, those shares have already been traded with a new owner. The important point is that since the sale occurred on the ex-date, the original owner is still entitled to the full dividend amount for the 1,000 shares he originally owned.

Thus, because he held 1,000 shares of ABC Corporation at the time of declaration and before the record date, he is entitled to receive dividends on those 1,000 shares, regardless of his subsequent sale of 500 shares. This is why the answer is that he is entitled to receive dividends on 1,000 shares.