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It has to be E because in order for us to know 25% of what, we have to know the date the dividend was declared and the value as of the date the company declares as the dividend date. Stock might be $52 now, but if the dividend date is figured as of 2 weeks ago when the stock was $49.50.
------------------------------------ J Allen Morris **I'm pretty sure I'm right, but then again, I'm just a guy with his head up his a$$.
8. 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%
total profit = profit from selling share + dividend profit from selling share = $2
I) insuff since we don't know dividend II) insuff since we don't know the frequency of dividends
I&II => suff, we have both profit from shares & dividend & dividend frequency
Answer should be C
You don't know the base for which the dividend was applied (stocls do not have face values), you don't know the inflation rate (this will eat away at your profit), you don't know the commission charge, exchange fee, etc. --- Definitely a general knowledge question, not a GMAT question.
Factorials were someone's attempt to make math look exciting!!!
You also don't know whether the person sold the share before/after dividend declared.
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