Answer:
The number of new shares = 6
Step-by-step explanation:
Dividend is the proportion of profit paid by a company to its shareholder as a form of return on their investment. Another form of return on share investment is the capital gain; which is the difference between the selling price of a share now and its cost when it was purchased.
For Jodi, we need to first calculate the amount of dividends earned on the total shares she owns. And then divide the result by the current purchase price of a share to arrive at the number of shares she can buy more. This is done as follows:
Total dividends = 112× 0.80 = $89.6
Current price of a share = $16.20
THe number of shares that can be purchased= 89.6/16.20=5.5
The number of new shares = 6