One year ago,you purchased a stock at a price of $33. The stock pays quarterly dividends of $.60 per share. Today,the stock is worth $35.2 per share. What is the total amount of your dividend income to date from this investment?
A) $0.60
B) $1.80
C) $2.40
D) $3.00
E) $3.20

Question

Quizplus · Accepted Answer

The stock pays quarterly dividends, which means that there are 4 quarters in a year.

Dividend per share per quarter = $0.60
Dividend per share per year = 4 x $0.60 = $2.40

Since you purchased the stock one year ago, you have received 4 quarterly dividends.

Total dividend income to date = Number of shares x Dividend per share

Number of shares = 1 (since you purchased only one share)

Total dividend income = 1 x $2.40 = $2.40

Therefore, choice C ($2.40) is the correct answer.

One Year Ago,you Purchased a Stock at a Price of $33