Problem 3-1 Stock Quotations (LO2, CFA3) You found the following stock quote for

Question

Problem 3-1 Stock Quotations (LO2, CFA3) You found the following stock quote for DRK Enterprises, Inc., at your favorite website. You also found that the stock paid an annual dividend of $0.75, which resulted in a dividend yield of 1.30 percent. DAILY Symbol DRK Vol 18,649,130 YTD %Chg 8.73% Close Company DRK Enterprises Chg 0.26 %Chg 0.45% a. What was the closing price for this stock yesterday? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Closing price b. How many round lots of stock were traded? (Round your answer to the nearest whole round lot.) Traded lots

Explanation / Answer

Question a). Solution :- Dividend yield = Annual dividend on stock / Current price of stock.

0.013 = 0.75 / Current price of stock

Current price of stock = 0.75 / 0.013

Current price of stock = $ 57.69

Closing price of the stock on yesterday = 57.69 - 0.45 % of 57.69

= 57.69 - 0.26 (approx)

= $ 57.43 (approx).

Conclusion :- Closing price of the stock on yesterday = $ 57.43 (approx).

Question b). Answer :- Traded lots = 18649130 / 100

= 186491.30 (Rounded off to 186491)

Conclusion :- Traded lots = 186491.

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