Question

10. CHALLENGE PROBLEM The Racitis own 300 shares of Clayton

Manufacturing, which they purchased at $36.30 per share. They also
purchased 200 shares at $22.50 per share. The dividend per share paid
by the company is $0.72. (a) What is the average price per share?
(b) What are the Racitis' annual dividends? (c) What is the average
annual yield?

Answer 1

The right answer is:

(a) $30.78

(b) $360

(c) 2.339%

Explanation:

The given values are:

At $36.30 per share,

Purchased = 300 shares

At $22.50 per share,

Purchased = 200 shares

Per share dividend,

= $0.72

Now,

(a)

The average price per share will be:

=
`((300* 36.30)+(200* 22.50))/(300+200)`

=
`(10,890+4,500)/(500)`

=
`(15,390)/(500)`

=
`30.78` ($)

(b)

The annual dividend will be:

=
`0.72* Number \ of \ shares`

=
`0.72* 500`

=
`360` ($)

(c)

The average annual yield will be:

=
`(Dividend \ per \ share)/(Average \ cost)* 100`

=
`(0.72)/(30.78)* 100`

=
`2.339`%