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ameris82
June 4th, 2007, 12:36 PM
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%

drbyadav
June 4th, 2007, 04:34 PM
No clues!!!!!!!!!!! plz explain how to approach these questions

Nakul
June 5th, 2007, 02:52 AM
The answer should be C.

Dividend is like money earned on your investment.

ST1 alone - Tells about the method how dividen is being paid but nothing about the % dividend.

ST2 alone - The vice versa of St1.

Combining both: we get the total profit as dividend earned on his investment + (Other profit)
=> 25% of 50 + (52-50)
Thus the answer should be C

Whats the OA...???

ameris82
June 6th, 2007, 12:07 AM
unfortunately, dont have OA for this one

whoishemu
June 6th, 2007, 04:54 AM
Nakul's explanation is correct. C should be the ans.

meen15
June 6th, 2007, 03:33 PM
C is correct if we consider that person buys only one share. q doen't clearly say that.

Nakul
June 6th, 2007, 10:47 PM
Meen15...question clearly says that the preson buys only 1 share.

"A person buys a share for $ 50..."

aks21
June 9th, 2007, 03:16 AM
my stab is on ... C

amit gupta
July 3rd, 2007, 11:03 AM
hey guys..i will say that the answer is B.........

st statement does not give anything except telling that the dividend is being paid by the company............

St2 tells the percentage dividend..........when there is a word dividend it is clear that it is paid by the company to the shareholder.....and it is always a reward of putting money in the company as a shareholder..so it clearly is a part of a profit and the infact the only profit if the share was not sold...............

So we can calculate profit from the 2nd statement as NAkul did without statement 1

Nakul
July 3rd, 2007, 11:11 PM
Amit...actually if we do not consider that the dividend is being paid anually, then we do not know how to calculate the interest on the share, whether anually, semi-anually or quaterly. This information in provided by St1.

In each case the answer may differ:

Taking anually:
25% of 50 + (52-50)

Taking semi-anually:
50(1+25/200)^2 - 50 + (50-52) Similarly we get a different value for quarterly.

Thus both are required.

amit gupta
July 4th, 2007, 12:47 AM
right buddy...thanx