You own 30 shares in a company that has 1,000shares outstanding. During 2017, the company generated $35,000 in profit. They plan on reinvesting $20,000 back into the company and issuing the rest as a dividend. How much should you expect in your dividend payment?

Question

Derrick Allen

Mathematics

10 January, 02:52

You own 30 shares in a company that has 1,000shares outstanding. During 2017, the company generated $35,000 in profit. They plan on reinvesting $20,000 back into the company and issuing the rest as a dividend. How much should you expect in your dividend payment?

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Gibbs · Answer 1

They are going to pay out 35000 - 20000 = 15000 in dividends

There are 1000 shares outstanding

15000 / 1000 = 15 dollars per share. That is a really big dividend unless each share costs (say) 20000 dollars. Now the payout is not that good.

Answer: $15.00 / per share.