GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 25 Aug 2019, 21:55

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

A certain company expects quarterly earnings of $0.80 per

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Find Similar Topics 
Manager
Manager
avatar
Joined: 23 Mar 2008
Posts: 209
A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post Updated on: 03 Apr 2015, 10:02
2
18
00:00
A
B
C
D
E

Difficulty:

  25% (medium)

Question Stats:

79% (02:03) correct 21% (02:38) wrong based on 554 sessions

HideShow timer Statistics

A certain company expects quarterly earnings of $0.80 per share of stock, half of which will be distributed as dividends to shareholders while the rest will be used for research and development. If earnings are greater than expected , shareholders will receive an additional $0.04 per share for each additional $0.10 of per share earnings. If quarterly earnings are $1.10 per share, what will be the dividend paid to a person who owns 200 shares of the company's stock?

A. $92
B. $96
C. $104
D. $120
E. $240

Originally posted by puma on 24 May 2008, 12:42.
Last edited by Bunuel on 03 Apr 2015, 10:02, edited 1 time in total.
Renamed the topic, edited the question, added the OA and moved to PS forum.
Most Helpful Community Reply
SVP
SVP
User avatar
B
Joined: 30 Apr 2008
Posts: 1740
Location: Oklahoma City
Schools: Hard Knocks
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 24 May 2008, 13:16
3
6
C.

The company earned at least $0.80 per share, so 1/2 of that is $0.40. It also earned $0.30 more than expected. $0.04 for each $0.10 greater than exepcted = $0.12 more per share, for a total of $0.52. To answer the question, we have to multiply 200 by $0.52. This equals $104.00.

puma wrote:
A certain company expects quarterly earnings of $0.80 per share of stock, half of which will be distributed as dividends to shareholders while the rest will be used for research and development. If earnings are greater than expected , shareholders will receive an additional $0.04 per share for each additional $0.10 of per share earnings. If quarterly earnings are $1.10 per share, what will be the dividend paid to a person who owns 200 shares of the company's stock?

a) $92
b) $96
c) $104
d) $120
e) $240

_________________
------------------------------------
J Allen Morris
**I'm pretty sure I'm right, but then again, I'm just a guy with his head up his a$$.

GMAT Club Premium Membership - big benefits and savings
General Discussion
Director
Director
avatar
Joined: 05 Jan 2008
Posts: 596
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 24 May 2008, 13:20
I get C too.

0.8 -> 0.4

for 1.1 it would be 0.4 + 3*(0.4)=0.52 * 200 =104
VP
VP
avatar
Joined: 28 Dec 2005
Posts: 1352
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 24 May 2008, 16:27
i get C as well

we start off with 0.4 cents per share ... and since we have 1.1-0.8=0.3 in additional earnings, that means each shareholder gets 3*0.04=0.12 cents per share.

Total therefore is 0.012+0.4 = 0.52*200 = 104
SVP
SVP
avatar
Joined: 29 Mar 2007
Posts: 2232
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 04 Jun 2008, 06:25
puma wrote:
A certain company expects quarterly earnings of $0.80 per share of stock, half of which will be distributed as dividends to shareholders while the rest will be used for research and development. If earnings are greater than expected , shareholders will receive an additional $0.04 per share for each additional $0.10 of per share earnings. If quarterly earnings are $1.10 per share, what will be the dividend paid to a person who owns 200 shares of the company's stock?

a) $92
b) $96
c) $104
d) $120
e) $240


EPS Actual> EPS expected.

each gets and additional .12 per share.

Thus .52*200 --> 52*2 --> $104
Intern
Intern
avatar
Joined: 04 Jun 2008
Posts: 2
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 04 Jun 2008, 13:14
A simple one
Answer is C. :shock:

Please let us know if we are missing the catch here. :roll:
Intern
Intern
avatar
Joined: 08 Nov 2014
Posts: 1
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 13 Sep 2015, 22:17
I'm having little issues with the way the question is worded. If half of $0.80 is distributed to shareholders and we are asked to find how much one shareholder collects, isn't it wrong to add $0.40 to $0.12 when $0.40 is the amount to be distributed amongst shareholders and doesn't belong to one person.
Intern
Intern
avatar
Joined: 28 Oct 2015
Posts: 21
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 19 Nov 2015, 08:40
engremmy:

Shareholders here is used in a general sense. It means to each share holder and since the question asks you ....the dividend paid to PERSON....? It means to A stakeholder.
Intern
Intern
avatar
Joined: 06 May 2016
Posts: 33
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 11 Aug 2016, 19:19
1
Should we not divide 1.1 into 2 halves rather than 0.8 .Since 1.1 is actual income.So final dividend would be 1.1*200/2 = 110 - 0.12*200
Intern
Intern
User avatar
B
Joined: 07 Dec 2016
Posts: 38
Reviews Badge
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 06 May 2017, 15:32
C
So 0.4 + (((1.1-0.8)/0.1)*0.04) = 0.52 x 200 = 104
_________________
Cheers!
If u like my post..... payback in Kudos!! :beer
Manager
Manager
avatar
B
Joined: 23 Dec 2013
Posts: 141
Location: United States (CA)
GMAT 1: 710 Q45 V41
GMAT 2: 760 Q49 V44
GPA: 3.76
Reviews Badge
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 22 Jul 2017, 18:38
1
puma wrote:
A certain company expects quarterly earnings of $0.80 per share of stock, half of which will be distributed as dividends to shareholders while the rest will be used for research and development. If earnings are greater than expected , shareholders will receive an additional $0.04 per share for each additional $0.10 of per share earnings. If quarterly earnings are $1.10 per share, what will be the dividend paid to a person who owns 200 shares of the company's stock?

A. $92
B. $96
C. $104
D. $120
E. $240


I dislike the wording of the problem. That said, the OA approach is as follows:

0.4*200 = earnings to a shareholder who has 200 shares of the stock = 4/10*200 = 4*20 = 80.

Since the actual earnings are 1.10 = 30 cents higher, the shareholder will receive 3*0.04 = 0.12 cents per share as well.

12/100*200 = 2*12 = 24

24+80 = 104.
Intern
Intern
User avatar
B
Joined: 27 Feb 2018
Posts: 8
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 29 Mar 2018, 04:25
The wording of the problem is extremely confusing. Why shouldn't we divide the quarterly earnings ($1.10) by 2, and then add the additional amount ($0.12)? The even split of quarterly earnings can be seen as a company's general rule of dividing up earnings, as much as a particular rule if those quarterly earnings are $0.80.
Target Test Prep Representative
User avatar
D
Status: Founder & CEO
Affiliations: Target Test Prep
Joined: 14 Oct 2015
Posts: 7482
Location: United States (CA)
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 30 Mar 2018, 10:46
puma wrote:
A certain company expects quarterly earnings of $0.80 per share of stock, half of which will be distributed as dividends to shareholders while the rest will be used for research and development. If earnings are greater than expected , shareholders will receive an additional $0.04 per share for each additional $0.10 of per share earnings. If quarterly earnings are $1.10 per share, what will be the dividend paid to a person who owns 200 shares of the company's stock?

A. $92
B. $96
C. $104
D. $120
E. $240


The person who owns the 200 shares will initially be paid dividends of 200 x $0.8 x 1/2 = $80.

The $1.10 is $0.30 more than expected, so the person will be paid an extra 3 x $0.04 x 200 = $24.

The total dividend will thus be 80 + 24 = $104.

Answer: C
_________________

Scott Woodbury-Stewart

Founder and CEO

Scott@TargetTestPrep.com
TTP - Target Test Prep Logo
122 Reviews

5-star rated online GMAT quant
self study course

See why Target Test Prep is the top rated GMAT quant course on GMAT Club. Read Our Reviews

If you find one of my posts helpful, please take a moment to click on the "Kudos" button.

Manager
Manager
User avatar
B
Joined: 11 May 2018
Posts: 88
Location: India
GMAT 1: 460 Q42 V14
GMAT ToolKit User
Re: A certain company expects quarterly earnings of $0.80 per  [#permalink]

Show Tags

New post 14 Aug 2018, 08:33
Quote:
The person who owns the 200 shares will initially be paid dividends of 200 x $0.8 x1/2= $80. // Here the highlighted part is written because it is mentioned in the question that half of 0.8 is shared as dividends to shareholders

The $1.10 is $0.30 more than expected, so the person will be paid an extra 3 x $0.04 x 200 = $24. //Now the earnings were .30 greater.So the .30 should be halved right??

The total dividend will thus be 80 + 24 = $104.


ScottTargetTestPrep
please help me with this.
Thankyou.
_________________
If you want to Thank me Give me a KUDOS
"I’ve spent months preparing for the day I’d face you. I’ve come a long way, GMAT"- SonGoku
GMAT Club Bot
Re: A certain company expects quarterly earnings of $0.80 per   [#permalink] 14 Aug 2018, 08:33
Display posts from previous: Sort by

A certain company expects quarterly earnings of $0.80 per

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  





Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne