Steve purchased 300 shares of Alpha Beta stock on May 9. On May 15, he purchased another 300 shares

55.

Steve purchased 300 shares of Alpha Beta stock on May 9. On May 15, he purchased another 300 shares and then on May 22 he purchased a final 400 shares of Alpha Beta stock. The company declared a dividend of $1.60 a share on April 30 to holders of record on Friday, May 23. The dividend is payable on June 2. How much dividend income will Steve receive on June 2 from Alpha Beta?    A.  $0 B.  $480 C.  $960 D.  $1,200 E.  $1,600 Dividend received = $1.60(300 + 300) = $960

56.

On July 7, you purchased 500 shares of Wagoneer, Inc. stock for $21 a share. On August 1, you sold 200 shares of this stock for $28 a share. You sold an additional 100 shares on August 17 at a price of $25 a share. The company declared a $0.95 per share dividend on August 4 to holders of record as of Wednesday, August 15. This dividend is payable on September 1. How much dividend income will you receive on September 1 as a result of your ownership of Wagoneer stock?    A.  $0 B.  $190 C.  $285 D.  $360 E.  $475 Dividend received = $0.95 × (500 - 200) = $285

57.

Webster United is paying a $1.10 per share dividend today. There are 350,000 shares outstanding with a market price of $25 per share. Ignore taxes. Before the dividend, the company had earnings per share of $1.74. As a result of this dividend, the:    A.  retained earnings will decrease by $350,000. B.  retained earnings will increase by $385,000. C.  total firm value will not change. D.  earnings per share will increase to $2.84. E.  price-earnings ratio will be 13.74. Price-earnings ratio after the dividend = ($25 - $1.10)/$1.74 = 13.74