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. $92B. $96C. $104D. $120E. $240

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Parrain Parrain · Answer 1 · 2021-07-11T06:16:30+02:00

Answer: C. $104

Explanation:

The company expected $0.80 earnings per share but got $1.10. This means that they exceeded target by $0.30.

They will give $0.04 extra dividend for every $0.10.

Total extra dividend = 0.04 * 0.30/0.1

= $0.12 per share

This is in addition to the normal dividend of:

= 0.80 / 2

= $0.40

Total dividend per share:

= 0.12 + 0.40

= $0.52

Person who owns 200 shares will get:

= 0.52 * 200

= $104

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