Homework Answers
Cost of each share = Price per share - dividend per share
= $80 - $1.75
= $78.25
Amount of investment in stock is = Number of shares purchased X cost of shares
= 100 X $78.25
= $7,825
Dividend receivable = Number of shares X dividend per share
= 100 X $1.75
= $175
Dividend receivable is asset.
Cash paid = Number of shares X price per share
= 100 X $80
= $800
Correct option is Option B
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