Types of dividends: You own 20,000 shares of stock in Casi-knows, Inc., which has just sold one of its large resort hotels for $300 million. Management intends to return the entire revenue from the sale to shareholders by issuing a special dividend. If Casi-knows has 20 million shares outstanding, how large a dividend payment do you expect to receive?

Question

Quizplus · Accepted Answer

The total dividend payment is $300 million, and there are 20 million shares outstanding. Therefore, each share will receive a dividend of $300 million / 20 million shares = $15 per share. Since the investor owns 20,000 shares, they will receive a dividend payment of 20,000 shares * $15 per share = $300,000.

Types of Dividends: You Own 20,000 Shares of Stock in Casi-Knows