DVD Entertainment Group Ltd has declared a final dividend per share of $0.50 to be paid in the form of a dividend reinvestment plan.The weighted average price of DVD shares for the five days after the record date relating to this dividend was $15.80.If an investor currently owns 5,000 shares how many new shares will they receive under the scheme?

Question

Quizplus · Accepted Answer

To calculate the number of new shares an investor will receive under the dividend reinvestment plan, we need to divide the dividend per share by the weighted average price of the shares.

Dividend per share = $0.50
Weighted average price of shares = $15.80

Dividend reinvestment shares = Dividend per share / Weighted average price of shares
= $0.50 / $15.80
= 0.03164557

The investor currently owns 5,000 shares, so the number of new shares they will receive is:

New shares = Dividend reinvestment shares x Number of shares currently owned
= 0.03164557 x 5,000
= 158.22

Therefore, the investor will receive 158 new shares under the scheme. The closest option is C, which is 158.

DVD Entertainment Group Ltd Has Declared a Final Dividend Per