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# Company A expects earnings of \$0.90 per share of stock, two-third of w

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Math Expert
Joined: 02 Sep 2009
Posts: 58410
Company A expects earnings of \$0.90 per share of stock, two-third of w  [#permalink]

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27 Sep 2018, 05:34
00:00

Difficulty:

25% (medium)

Question Stats:

81% (01:56) correct 19% (02:21) wrong based on 27 sessions

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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

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Joined: 19 Oct 2013
Posts: 516
Location: Kuwait
GPA: 3.2
WE: Engineering (Real Estate)
Re: Company A expects earnings of \$0.90 per share of stock, two-third of w  [#permalink]

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27 Sep 2018, 07:37
1
2/3 of 0.9 = 0.6

Also since we are given that they will distribute 0.05 for each additional 0.15 in the share. We know 1.2 - 0.9 = 0.3 = 2 * 0.15

So that means each share holder will receive 0.7 dividends in return.

0.7 * 500 = 350

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Re: Company A expects earnings of \$0.90 per share of stock, two-third of w   [#permalink] 27 Sep 2018, 07:37
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