Question

Rob owns stock in dowc beverage co. and agram imports. he owns 86 more shares of agram imports, which pays a dividend of $5.15 per share, than he does of dowc beverage co., which pays $6.52 per share. if rob receives $4,585.15 in dividends annually, how many shares of agram imports does he own? a. 535 shares b. 635 shares c. 398 shares d. 441 shares

Answer 1

If Rob receives $4,585.75 in annual dividends, the number of shares of Agram Imports that Rob owns is D. 441 shares.

What is a dividend?

A dividend is the distribution of cash or stock that a company makes to its stockholders periodically.

Dividends are usually based on a dividend payout ratio, determined by the Board of Directors of the company.

Data and Calculations:

                                       Dowc Beverage Co.     Agram Imports

Dividend per share                 $6.52                               $5.15

Number of shares                    x                                     x+ 86

Number of shares                 355 (441 - 86)                  441 (355 + 86)

Total dividend received      $2,314.60 ($4,585.75 - $2,271.15))  $2,271.15

which is equivalent to $2,314.60 ($355 x $6.52)

Assuming total shares from Agram Imports to be 441, the total dividends will be $2,271.15 ($5.15 x 441), and, the dividend from Dowc Beverage Co. will be $2,314.60 and the number of shares will be 355 ($2,314.60/$6.52), which is 86 less than the shares in Agram Imports.

Thus, if Rob receives $4,585.75 in annual dividends, the number of shares of Agram Imports that Rob owns is D. 441 shares.

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