Question

On May 18th, you purchased 1,000 shares of Buy Lo stock. On June 5th, you sold 200 shares of this stock for $21 a share. You sold an additional 400 shares on July 8th at a price of $22.50 a share. The company declared a $.50 per share dividend on June 25th to holders of record as of Thursday, July 10th. This dividend is payable on July 31st. How much dividend income will you receive on July 31st as a result of your ownership of this firm's stock

Answer 1

Dividend income received = $400

Step-by-step explanation:

Given:

May 18th Purchased 1,000 shares

June 5th Sold 200 shares

July 8th Sold 400 shares

declared dividend on June 25th to holders

Dividend amount = $0.50 per share

Computation of dividend income received:

Balance of share on June 25th = May 18th (Purchase) - June 5th (Sold)

Balance of share on June 25th = 1,000 - 200

Balance of share on June 25th = 800 shares

Dividend income received = Balance of share on June 25th × Dividend amount

Dividend income received = $.50 × (1,000 share - 200 share)

Dividend income received = $400