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bretania · 2009 August 16th, 04:02 PM

Can someone please explain? The answer here is A.

Mr. Bombo owns two kinds of stock shares; r shares of stock X and m shares of stock Y. Stock X yields and annual dividend of 2%, while stock Y yields an annual dividend of 6%. If Mr. Bombo were to sell all of his shares of stock X and use that money to purchase shares of stock Y, by what percent would his annual dividend increase?

(1) Each share of stock X costs twice as much as each share of stock Y.
(2) Each share of stock Y costs $50.

clock60 · 2009 August 17th, 05:40 PM

Quote:

Originally Posted by bretania

Can someone please explain? The answer here is A.

Mr. Bombo owns two kinds of stock shares; r shares of stock X and m shares of stock Y. Stock X yields and annual dividend of 2%, while stock Y yields an annual dividend of 6%. If Mr. Bombo were to sell all of his shares of stock X and use that money to purchase shares of stock Y, by what percent would his annual dividend increase?

(1) Each share of stock X costs twice as much as each share of stock Y.
(2) Each share of stock Y costs $50.

bretania
are you sure that the problem is written correctly
or oa is a ?

I break my mind trying to solve, but i can not understand how to solve without knowledge about number of shares x y, or at least ratio between them i try to insert different numbers but % increase was various any time
to my mind with given date the answer is E
What i am missing?

bretania · 2009 August 18th, 08:07 AM

I think I also answered E when I first saw the problem not because I was sure that E was "right" but simply because the problem proved too time consuming for me so I just picked an answer and then moved on.

Also, you're right. I read the explanation to this problem again and somehow i''m just not convinced on the reasoniing/logic behind.

So if a problem like this comes up, I'm expecting additional info such as the ration of the number of stocks between X and Y.. otherwise, yes, perhaps E is the answer.

ChandraXXX · 2009 August 18th, 08:10 AM

we dont know the value of r and m. My answer is E.

bretania · 2009 August 18th, 08:28 AM

Chandra, if we know the ratio of r and m, the answer is A, right?

manish8109 · 2009 August 18th, 11:28 AM

Guys....
I am trying to solve a question after a long time... Kindly bear with me if i had made any mistake....

r shares----- Stock X----- 2%
m Shared----- Stock Y ---- 6%

Statement 1: Let the cost of X share be 2p & Y share be p.
Total Value of Stock X= 2rp
Total Value of Stock Y= mp
=> r/m =2 => r=2m

Dividend-> (4mp*2/100) + (mp*6/100) = 14mp/100

Realization by selling r share of Stock X- 4mp
No. of share bought of Y ---- 4m

Total Value of Stock Y- 4mp+mp= 5mp
Dividend---- 5mp*6/100= 30mp/100

% Increase in Dividend= (30mp/100 - 14mp/100)/14mp/100 *100
= 16/14 *100
= 114.2% ----- Sufficient answer(A)

Statement 2: Cost of Share Y = 50
Don't about the quantity or the relation between the quantities.
Insufficient

clock60 · 2009 August 18th, 01:26 PM

Quote:

Originally Posted by manish8109

Guys....
I am trying to solve a question after a long time... Kindly bear with me if i had made any mistake....

r shares----- Stock X----- 2%
m Shared----- Stock Y ---- 6%

Statement 1: Let the cost of X share be 2p & Y share be p.
Total Value of Stock X= 2rp
Total Value of Stock Y= mp
=> r/m =2 => r=2m

Dividend-> (4mp*2/100) + (mp*6/100) = 14mp/100

Realization by selling r share of Stock X- 4mp
No. of share bought of Y ---- 4m

Total Value of Stock Y- 4mp+mp= 5mp
Dividend---- 5mp*6/100= 30mp/100

% Increase in Dividend= (30mp/100 - 14mp/100)/14mp/100 *100
= 16/14 *100
= 114.2% ----- Sufficient answer(A)

Statement 2: Cost of Share Y = 50
Don't about the quantity or the relation between the quantities.
Insufficient

Total Value of Stock X= 2rp
Total Value of Stock Y= mp
=> r/m =2 => r=2m
do you mean that total value of r shares x= total value of m shares y

but imagine that for example that price of one share of y=50
and according st1 price of one share of x will be 100
total value of x will be 100*r
and total value of y will be 50*m is it correct to equate both parts

Crack_Mat · 2009 August 18th, 06:27 PM

1) Is the question : By which % value of Dividend will increase ?
2) Or Will the value increase?

My calculation says that for 1) answer should be E as in final term of increment of dividend r and m comes, which are not given

If question is 2) then for sure dividend will increase as more shares so again we dont need any choice!

2009 August 16th, 04:02 PM	#1 (permalink)
bretania Eager! Join Date: May 2005 Posts: 67	Challenging DS, Percents,Ratios and Logic Can someone please explain? The answer here is A. Mr. Bombo owns two kinds of stock shares; r shares of stock X and m shares of stock Y. Stock X yields and annual dividend of 2%, while stock Y yields an annual dividend of 6%. If Mr. Bombo were to sell all of his shares of stock X and use that money to purchase shares of stock Y, by what percent would his annual dividend increase? (1) Each share of stock X costs twice as much as each share of stock Y. (2) Each share of stock Y costs $50.

2009 August 18th, 08:10 AM	#4 (permalink)
ChandraXXX Within my grasp! Join Date: Apr 2009 Posts: 343	we dont know the value of r and m. My answer is E. _ _ _ _ SIG _ _ _ _ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ In the book of life, the answers aren't in the back. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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2009 August 18th, 08:07 AM	#3 (permalink)
bretania Eager! Join Date: May 2005 Posts: 67	I think I also answered E when I first saw the problem not because I was sure that E was "right" but simply because the problem proved too time consuming for me so I just picked an answer and then moved on. Also, you're right. I read the explanation to this problem again and somehow i''m just not convinced on the reasoniing/logic behind. So if a problem like this comes up, I'm expecting additional info such as the ration of the number of stocks between X and Y.. otherwise, yes, perhaps E is the answer.

2009 August 18th, 08:28 AM	#5 (permalink)
bretania Eager! Join Date: May 2005 Posts: 67	Chandra, if we know the ratio of r and m, the answer is A, right?

2009 August 18th, 11:28 AM	#6 (permalink)
manish8109 TestMagic Guru Join Date: Oct 2004 Posts: 1,149	Guys.... I am trying to solve a question after a long time... Kindly bear with me if i had made any mistake.... r shares----- Stock X----- 2% m Shared----- Stock Y ---- 6% Statement 1: Let the cost of X share be 2p & Y share be p. Total Value of Stock X= 2rp Total Value of Stock Y= mp => r/m =2 => r=2m Dividend-> (4mp2/100) + (mp6/100) = 14mp/100 Realization by selling r share of Stock X- 4mp No. of share bought of Y ---- 4m Total Value of Stock Y- 4mp+mp= 5mp Dividend---- 5mp6/100= 30mp/100 % Increase in Dividend= (30mp/100 - 14mp/100)/14mp/100 100 = 16/14 *100 = 114.2% ----- Sufficient answer(A) Statement 2: Cost of Share Y = 50 Don't about the quantity or the relation between the quantities. Insufficient

2009 August 18th, 06:27 PM	#8 (permalink)
Crack_Mat This user's posts are moderated. Join Date: Aug 2009 Posts: 29	1) Is the question : By which % value of Dividend will increase ? 2) Or Will the value increase? My calculation says that for 1) answer should be E as in final term of increment of dividend r and m comes, which are not given If question is 2) then for sure dividend will increase as more shares so again we dont need any choice!

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