Question

Mutual Fund X owns 0.5% of the total stock of Company Y. In one particular year, Company Y announces annual profits of $12,000,000, and decides to pay dividends to its shareholders at a rate of 15% of its annual profits. How much will Mutua

Answer 1

Answer: $9,000

Explanation:

First calculate the total dividends that Company Y plans to pay.

= 12,000,000 * 15%

= $1,800,000

Then calculate the amount that Mutual fund X will get.

They own 0.5% of the total stock of Company Y so they will get;

= 0.5% * 1,800,000

= $9,000