Mr. Odusote owns two kinds of stock shares: r shares of stock X and r shares of stock Y. Stock X yields an annual
dividend or 2%, while stock Y yields an annual dividend or 6"/o. If Mr. Odusote were to sell all or 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 $45.
OE
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dividend or 2%, while stock Y yields an annual dividend or 6"/o. If Mr. Odusote were to sell all or 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 $45.
OE
[Reveal] Spoiler:
Set x and y equal value of one share of stock X and one share of stock Y, respectively
Monetary values of Mr. Odusote's dividends are (2%)(x)(r) and (6%)(y)(r).
To find percent increase in dividend when he sells X and buys Y, must know cost of a share of stock X and stock Y, or their relative costs.
(1): Sufficient. x = 2y. Since stock X costs twice as much per share, he can buy twice as many shares of stock Y, so new number of shares he owns is 3r
New value of dividend = (6%)(y)(3r) = (18%)(y)(r)
Old value = [(2%)(2y)(r) + (6%)(y)(r)] = (10%)(y)(r)
Percent increase in dividend = Value of new dividend (part) divided by old dividend (whole), minus 100%.
(2): Insufficient. Not given cost of stock X
Answer is (A)
Monetary values of Mr. Odusote's dividends are (2%)(x)(r) and (6%)(y)(r).
To find percent increase in dividend when he sells X and buys Y, must know cost of a share of stock X and stock Y, or their relative costs.
(1): Sufficient. x = 2y. Since stock X costs twice as much per share, he can buy twice as many shares of stock Y, so new number of shares he owns is 3r
New value of dividend = (6%)(y)(3r) = (18%)(y)(r)
Old value = [(2%)(2y)(r) + (6%)(y)(r)] = (10%)(y)(r)
Percent increase in dividend = Value of new dividend (part) divided by old dividend (whole), minus 100%.
(2): Insufficient. Not given cost of stock X
Answer is (A)