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# A certain company expects quarterly earnings of \$0.80 per

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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
A simple one

Please let us know if we are missing the catch here.
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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.
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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.
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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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
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
C
So 0.4 + (((1.1-0.8)/0.1)*0.04) = 0.52 x 200 = 104
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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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.
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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.
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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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.

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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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Re: A certain company expects quarterly earnings of \$0.80 per [#permalink]
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