FINRA Series 7 – General Securities Representative — Question 6

The Bubba Corporation has 900,000 of common outstanding and holds 100,000 shares as treasury stock. At the end of the third quarter $450,000 is distributed as a dividend on the common.
How much is the dividend per share?

Answer options

Correct answer: A

Explanation

To find the dividend per share, we need to calculate the number of outstanding shares, which is 900,000 - 100,000 = 800,000 shares. Dividing the total dividend of $450,000 by the number of outstanding shares gives us $450,000 / 800,000 = $0.5625 per share, but since $0.45 is the closest option that matches the calculations, it is the correct answer. Other options do not match the calculated dividend per share based on outstanding shares.