Neco Model Questions Vol1 2020 Commerce Question 45
Practice objective / multiple choice question 45 from the 2020 Neco Model Questions Vol1 Commerce examination.
An investor holds 1,200 shares of XYZ Ltd., currently trading at \(\text{₦}5,250\) each. XYZ announces a 20\% stock dividend (i.e., 0.20 additional share per share) and a cash dividend of \(\text{₦}120\) per share payable after the stock dividend is issued. One month later the company implements a 2‑for‑1 stock split. After the split the market price is expected to rise by 4\% per month due to improved earnings. Assuming the share price adjusts only to keep the market value unchanged after the stock dividend and halves after the split, calculate (a) the investor's total monetary gain after two months and (b) the overall percentage return on the original investment.
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About This Question
This is Neco Model Questions Vol1 2020 Commerce Question 45. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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