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Is there a catch?

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Is there a catch?

by gmataug08 » Wed Nov 26, 2008 9:55 am
A person buys a share for $ 50 and sells it for $ 52 after a year. What is the total profit made by him from the share?

(I) A company pays annual dividend
(II) The rate of dividend is 25%

imo answer C

seems too simple ...

disc: don't have OA :(
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by tnis0612 » Wed Nov 26, 2008 11:40 am
Who cares? Wheres this stock with a 25% dividend rate???? I won't need to even take the GMAT!

Seems like C to me...based on II alone you can't assume that the dividend is annual....I don't know...doesnt seem like the best question to me. In the real world...dividends are paid as a dollar amount...the % rate is just calculated based on whatever the current stock price is at the time. So really...you would need to know what the stock price was when the dividend was paid for the 25% to tell you anything. You don't necessarily know that the annual dividend was paid when the stock was at $52. Basically I just don't like the question :) My guess is that this isnt from gmatprep and you would see something a little more clear on the GMAT.
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