Question

Elizabeth recently purchased 115 shares of a company for $10350 ($90 per share). The company has been doing well. This year, she received a dividend of $1035. Given the success of the company, her shares are now worth $270 each. What is Elizabeth’s per share basis in the company?

Answer 1

$90

Step-by-step explanation:

Option B is wrong because $1,035 is the dividend received from the company by Elizabeth.

Option C is wrong because $270 is the current market price of each share.

Option D is incorrect because $10,350 is the common stock value of 115 shares.

Option A is correct because $90 is Elizabeth's per-share basis in the company for which she received a dividend. Share's price increased to $270 after success.