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Finra Exam Series-7 Topic 3 Question 84 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 84
Topic #: 3
[All Series-7 Questions]

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?

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Suggested Answer: A

$0.45. Since treasury stock does not receive dividends, divide $450,000 by the outstanding 100,000 shares to arrive at $0.45 per share.


by Shonda at Apr 14, 2024, 03:32 PM

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Yolando
6 months ago
So, the correct answer is B) $0.50 then
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Arlean
6 months ago
I believe the dividend per share is $0.50 as well, since $450,000 is distributed on the common shares
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Florinda
6 months ago
With 900,000 common outstanding shares, the dividend per share should be $0.50
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Jettie
6 months ago
I agree, let's find out the correct answer
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Yolando
6 months ago
I think we need to calculate the dividend per share
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Malcom
6 months ago
I think the dividend per share is $0.50 because we have to consider only the outstanding shares, not the treasury stock.
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Lili
7 months ago
Actually, I believe the dividend per share is $2.00.
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Pauline
7 months ago
I agree with The dividend per share should be $0.50.
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Alysa
8 months ago
I think the dividend per share is $0.50.
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Amos
8 months ago
Okay, I think I've got it now. This is a straightforward dividend calculation, and the treasury stock doesn't affect the result. I'm feeling more confident about this question.
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Kate
9 months ago
Good point. Treasury stock is not considered outstanding, so we should only use the 900,000 shares of common stock that are actually out there. The calculation would be the same: $450,000 / 900,000 = $0.50 per share.
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Natalie
9 months ago
I agree with the calculation, but I'm a bit concerned about the wording of the question. It mentions that the company holds 100,000 shares as treasury stock. Do we need to factor that into the equation somehow?
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Anjelica
9 months ago
That's right! So, the calculation would be $450,000 / 900,000 shares = $0.50 per share. The answer is B) $0.50.
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Dorian
9 months ago
Okay, let's think this through. We have 900,000 shares of common stock outstanding, and the company is distributing $450,000 as a dividend. To find the dividend per share, we need to divide the total dividend amount by the number of outstanding shares.
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Wilford
9 months ago
Hmm, this question seems straightforward, but I want to make sure I understand it correctly. Can someone walk me through the steps to solve this problem?
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Lelia
7 months ago
That's correct. The closest option to $0.5625 is $0.50, so the correct answer must be B) $0.50.
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Albina
7 months ago
If we divide $450,000 by 800,000 shares, we get $0.5625 per share.
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Edgar
7 months ago
Right, we made an error. Let's correct it and find the correct dividend per share.
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Renea
7 months ago
That gives us $0.5625 per share, which is not listed as an option. We made a mistake.
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Lelia
7 months ago
Next, we divide the total dividend of $450,000 by the remaining shares.
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Albina
7 months ago
So, 900,000 total outstanding shares minus 100,000 treasury shares equals 800,000 shares.
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Edgar
8 months ago
First, we need to subtract the treasury stock from the total outstanding shares.
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