Answers26-27 Ignite Financial Literacy Personal Finance - EL3403Investing in StocksQuestion 2
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Investing in Stocks

Question 2 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

Liz owns stock in Nar Heating/Cooling and Cilla Shipping. She owns 120 more shares of Cilla Shipping than she does of Nar Heating/Cooling. Nar Heating/Cooling pays a yearly dividend of $5.78 per share, and Cilla Shipping pays a yearly dividend of $4.15 per share. If Liz receives $1630.02 in dividends annually, how many shares of Nar Heating/Cooling does she own?

Answer
A
196 shares
B
114 shares
C
348 shares
D
282 shares

Explanation

Let x be the number of Nar Heating/Cooling shares. Liz owns x + 120 Cilla Shipping shares, so her annual dividends total 5.78x + 4.15(x + 120) = 1,630.02. Simplifying gives 9.93x + 498 = 1,630.02, so x = 1,132.02 ÷ 9.93 = 114. Liz owns 114 shares of Nar Heating/Cooling, which is choice B.

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