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# A person buys a share for $50 and sells it for$ 52 after a

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Director
Joined: 22 Aug 2007
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A person buys a share for $50 and sells it for$ 52 after a [#permalink]

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18 Oct 2007, 22:19
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

A person buys a share for $50 and sells it for$ 52 after a year. What is the total profit made by him from the share?
(I) A company pays annual dividend
(II) The rate of dividend is 25%

(A) Statement (I) ALONE is sufficient, but statement (II) alone is not sufficient
(B) Statement (II) ALONE is sufficient, but statement (I) is not sufficient
(C) BOTH statements TOGETHER are sufficient, but NEITHER statement alone is sufficient
(D) Each statement ALONE is sufficient
(E) Statements (I) and (II) TOGETHER are NOT sufficient
VP
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18 Oct 2007, 22:48

Selling price = 52
Dividend paid = x
Cost = 50

52+x-50 = Profit

statement does not state the dividend amonut and statement 2 does not tell you the rate per share .

this is true even if you combine both.

this is not so good of a question.

Director
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18 Oct 2007, 22:57
KillerSquirrel wrote:

Selling price = 52
Dividend paid = x
Cost = 50

52+x-50 = Profit

statement does not state the dividend amonut and statement 2 does not tell you the rate per share .

this is true even if you combine both.

this is not so good of a question.

Agree KS!

Thank you
Director
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Re: little finance...not sure if i got the right answer, no [#permalink]

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18 Oct 2007, 23:32
IrinaOK wrote:
A person buys a share for $50 and sells it for$52 after a year. What is the total profit made by him from the share?

(I) A company pays annual dividend
(II) The rate of dividend is 25%

I agree with killer that the question is pretty vauge since it tells nothing about taxes and brokarage fees. taxes and brokarage fees are also part of share investment. therefore, it is E..

however we can identify the DPS rate, which equal to dividend rate (also called dividend yeild) times purchase price.

so E should not be a wrong answer.
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18 Oct 2007, 23:46
KillerSquirrel wrote:

Selling price = 52
Dividend paid = x
Cost = 50

52+x-50 = Profit

statement does not state the dividend amonut and statement 2 does not tell you the rate per share .

this is true even if you combine both.

this is not so good of a question.

You nailed that. =)
VP
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Posts: 1146
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Re: little finance...not sure if i got the right answer, no [#permalink]

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18 Oct 2007, 23:49
Himalayan wrote:
IrinaOK wrote:
A person buys a share for $50 and sells it for$52 after a year. What is the total profit made by him from the share?

(I) A company pays annual dividend
(II) The rate of dividend is 25%

I agree with killer that the question is pretty vauge since it tells nothing about taxes and brokarage fees. taxes and brokarage fees are also part of share investment. therefore, it is E..

however we can identify the DPS rate, which equal to dividend rate (also called dividend yeild) times purchase price.

so E should not be a wrong answer.

I'm not aware of any company that pays dividend on the purchase price of a stock. This is literally impossible for the company to calculate. the dividend payed is usualy expressed as DPS in currancy terms (i.e 20 cent per share) and then calculated as DPS/PPS as a percent.

Re: little finance...not sure if i got the right answer, no   [#permalink] 18 Oct 2007, 23:49
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