You purchased 200 shares of ABC stock on July 15th.On July 20th,you purchased another 100 shares and then on July 22nd you purchased your final 200 shares of ABC stock.The company declared a dividend of $1.10 a share on July 5th to holders of record on Friday,July 23rd.The dividend is payable on July 31st.How much dividend income will you receive on July 31st from ABC?

Question

Quizplus · Accepted Answer

To calculate the dividend income, we need to find out how many shares we own on the record date (July 23rd).

On July 23rd, we own a total of 500 shares of ABC stock (200 + 100 + 200).

Therefore, the dividend income we will receive on July 31st from ABC is:

500 shares x $1.10 dividend per share = $550

However, we only owned the 200 shares we bought on July 22nd for one day before the ex-dividend date (July 23rd).

So, we will not receive any dividend income for those shares.

The dividend income for the remaining 300 shares is:

300 shares x $1.10 dividend per share = $330

Therefore, the correct answer is C) $330.

You Purchased 200 Shares of ABC Stock on July 15th