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Company A expects earnings of $0.90 per share of stock, two-third of w
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11 Dec 2023, 02:31
11 Dec 2023, 02:31
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Company A expects earnings of $0.90 per share of stock, two-third of which will be distributed as dividends to shareholders and the rest will be used as contingency budget. If earnings are greater than $0.90 per share of stock, shareholders will receive an additional $0.05 per share for each additional $0.15 of per share earnings. If the earnings are $1.20 per share, what will be the dividend paid to a shareholder who owns 500 shares?
(A) $204
(B) $240
(C) $350
(D) $360
(E) $390
(A) $204
(B) $240
(C) $350
(D) $360
(E) $390
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Re: Company A expects earnings of $0.90 per share of stock, two-third of w
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12 Dec 2023, 11:43
12 Dec 2023, 11:43
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The answer is C.
Dividend on the first $0.90 = 0.9 * 2/3 = $0.60
Dividend on the next $0.15 ($0.90 to $1.05) = $0.05
Dividend on the 2nd extra $0.15 ($1.05 to $1.20) = $0.05
--> Total dividend = (0.60 + 0.05 + 0.05) * 500 = 0.7 * 500 = $350
Dividend on the first $0.90 = 0.9 * 2/3 = $0.60
Dividend on the next $0.15 ($0.90 to $1.05) = $0.05
Dividend on the 2nd extra $0.15 ($1.05 to $1.20) = $0.05
--> Total dividend = (0.60 + 0.05 + 0.05) * 500 = 0.7 * 500 = $350
gmatclubot
Re: Company A expects earnings of $0.90 per share of stock, two-third of w [#permalink]
12 Dec 2023, 11:43
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