Data Sufficiency

What does dividend mean?

Thanks,
Calista.

8. 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%
(A) Statement (I) ALONE is sufficient, but statement (II) alone is not sufficient
(B) Statement (II) ALONE is sufficient, but statement (I) is not sufficient
(C) BOTH statements TOGETHER are sufficient, but NEITHER statement alone is sufficient
(D) Each statement ALONE is sufficient
(E) Statements (I) and (II) TOGETHER are NOT sufficient

Dividend is the payment made by the stock issuer (company) to its shareholders. Dividend can be paid as cash or additional stock.

Coming to this question, A is not sufficient, which eliminates D too.

B is not sufficient as it does not specify the term of payment.

Also, it is not clear if the dividend is paid as stock or cash. C is not good

I would go for E.

But, is this a real GMAT question? The question is very ambiguous

Thanks for the effort.

Well, I don't know whether it's real GMAT question. It is from the tough_math questions, which is there in GMAT resources.

Calista.

1. No rate is given.
INSUFFICIENT.

2. Rate is 25% but you do not know how often the dividend is paid.
INSUFFICIENT.

Combining both, 25% annual dividend is paid. You can calculate the dividend and profit.

Hence C

Agree with Sujay! Sankruth, I think u have gone too far to calculate the dividend and the principal amount. I think here dividend means some % added to ur stock. So IMO C.

But I thought divident was paid on face value of the share. so without knowing the face value of the share we will not know how much dividend was paid...we just know the %. face value could be 1, 5, 10 or anyvalue....pls clarify if i am wrong.

joefreddy wrote:But I thought divident was paid on face value of the share. so without knowing the face value of the share we will not know how much dividend was paid...we just know the %. face value could be 1, 5, 10 or anyvalue....pls clarify if i am wrong.

IMO C..
4% capital Gains and 25% dividend..I agree that dividend is issued at face value..but in that scenario we may have to appropriately define Profit as well...Profit would be %Gain+ Dividend - %Capital gains tax - transcation fees-etc-etc...I think we can safely assume that we do not need to go into that much details....I think its fair to say C..I could be wrong though