Question

The Super Widget Corporation has 20,000 shares of stock outstanding. A. If it declares dividends of $42,500, what is the dividend per share of stock?B. What is Kevin Rainey's share of the declared dividend if he owns 50 shares?

Answer 1

Answer:

A. $42,500/20,000=$2.125 per share

B. Total dividend=50*2.125=$106.25

Explanation:

A. The dividend per share of the Super Widget Corporation can be calculated using the following formula:

Dividend per share=declared dividend amount/number of shares

                               =$42,500/20,000=$2.125 per share

B.Since the Kevin Rainey owns 50 shares of the Super Widget Corporation, therefore the total dividend of Kevin Rainey will be determined using the following formula:

Total dividend=50*2.125=$106.25