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ibm generated earnings per share last quarter of $5. the company has stated that it will pay its shareholders 10% of its earnings in the form of dividends. ibm has 100,000,000 shares outstanding and you own 100 of those shares. how much will you receive in total dividends (not per share) from your investment in ibm?

Respuesta :

The total value of the dividends you would receive from your investment in IBM is $50.

What is the total value of the dividends?

A stock is an equity instrument that is issued by public firms to raise capital for their activities. A stock gives the holder the right to receive dividends. Dividends are cash payments made to stockholders out of the profit earned. Dividends reduce the value of retained earnings.

Value of total dividends = number of shares you own x dividend that would be paid.

Dividend that would be paid = $5 x 0.1 = $0.50

Value of total dividends = $0.50 x 100 = $50

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