Question
A small company is started up that makes blankets. The company sells a total of 4,000 shares at \( \$ 20 \) each to raise money to start the business. At the end of the year, the company makes \( \$ 28,000 \) in profits and pays out \( \$ 8,000 \) in dividends Complete parts (a) through (f) below. (e) What is the dividend in dollars per share? The dividend per share is \( \$ 2.00 \) (Simplify your answer. Do not include the \( \$ \) symbol in your answer. Round to two decimal places as needed.) (f) What is the dividend as a percentage of the share price? The dividend per share is \( \square \% \) of the share price. (Simplify your answer. Round to one decimal place as needed.)
Ask by Christensen Martinez. in the United States
Dec 13,2024
Real Tutor Solution
Tutor-Verified Answer
Answer
The dividend as a percentage of the share price is 10.0%.
Solution
To find the dividend as a percentage of the share price, we can use the following formula:
\[
\text{Dividend Percentage} = \left( \frac{\text{Dividend per Share}}{\text{Share Price}} \right) \times 100
\]
From the information provided:
- Dividend per share = \( \$2.00 \)
- Share price = \( \$20.00 \)
Now, substituting the values into the formula:
\[
\text{Dividend Percentage} = \left( \frac{2.00}{20.00} \right) \times 100
\]
Calculating this:
\[
\text{Dividend Percentage} = \left( 0.1 \right) \times 100 = 10.0\%
\]
Thus, the dividend as a percentage of the share price is \( 10.0\% \).
Reviewed and approved by the UpStudy tutoring team
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Simplify this solution Beyond the Answer
To find the dividend as a percentage of the share price, you'll divide the dividend per share by the share price and then multiply by 100. Since the dividend per share is $2.00 and the share price is $20.00, it calculates as follows: \[ \text{Dividend Percentage} = \left(\frac{2.00}{20.00}\right) \times 100 = 10.0\% \] The dividend as a percentage of the share price is \(10.0\%\).
