Answered: Sophie Chan owns 100,000 shares of PAT… | bartleby

SWFT Corp Partner Estates Trusts

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter13: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 43P

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Sophie chan owns...accounting question please solve

Sophie Chan owns 100,000 shares of PAT Company. PAT is
selling for $40 per share, so her investment is worth
$4,000,000. Chan reinvests the gross amount of all dividends
received to purchase additional shares. Assume that the
clientele for PAT shares consists of tax-exempt investors. If
PAT pays a $1.50 dividend, Chan's new share ownership after
reinvesting dividends at the ex-dividend price would be
closest to:
A. $103,600.
B. $103,750.
C. $103,900.

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