Understanding Dividends: A Quick Guide for UCF FIN2100 Students

If an investor owns 220 shares and General Mills Corporation pays a dividend of $0.47 a share, what is the total dividend amount for the quarter?

• A. $0.47
• B. $47
• C. $94
• D. $103.40

Answer: (D)

The total dividend amount for the quarter can be calculated by multiplying the number of shares owned by the dividend per share. In this case, the investor owns 220 shares of General Mills Corporation, and the company pays a dividend of $0.47 per share. To find the total dividend, you would perform the following calculation: Total dividends = Number of shares × Dividend per share Total dividends = 220 shares × $0.47 per share Calculating that gives you: Total dividends = $103.40 Thus, the total dividend amount for the quarter is $103.40. This approach highlights how dividends work, where investors receive periodic payments based on the number of shares they hold, reinforcing the concept of returns on investment through dividends.

Imagine it’s a sunny day, and you’re sipping your morning coffee, ready to tackle a question that’s been bothering you. Let’s say you own 220 shares of General Mills Corporation, and you hear they’re paying a dividend of $0.47 per share. You might be thinking, “That sounds good, but how much am I actually going to get?” This is a perfect opportunity to delve into the world of dividends—a cornerstone concept in investing that every UCF FIN2100 student should master.

Here’s the thing: when companies earn profits, they often share a portion with their shareholders through dividends. It’s like getting a thank-you note for being an investor. Now, let's calculate that dividend together. To find the total dividend for the quarter, you'll use a simple formula:

Total Dividends = Number of Shares × Dividend Per Share.

In our case, you have 220 shares and a dividend of $0.47 per share. Let’s break it down:

Total Dividends = 220 shares × $0.47 per share = $103.40.

That’s right! Your payment for the quarter comes in at $103.40. You might now be thinking, “How does this tie into the bigger picture of investing?” Great question! Understanding dividends is crucial. It illustrates how your investments can generate income over time.

So why should you care about dividends? Well, they can provide a steady income stream, especially if you're building a portfolio with income-focused investments. Imagine relying on those dividends to take that long-awaited vacation or save for a future goal. It feels good to know that your investments are working for you, doesn’t it? This connection between dividends and personal finance is a delightful segue into realizing how dividends can bolster your investment strategy.

So, let's replay that calculation in your mind once more. $0.47 for each of your 220 shares brings you to the grand total of $103.40. If you find yourself in a situation where considering investments, remember: dividends are just one piece of the puzzle. They reflect a company’s financial health and can play a pivotal role in long-term wealth building.

As a UCF student diving into FIN2100, you’ll encounter various concepts that interweave to offer a comprehensive view of personal finance. Understanding how dividends work can give you an edge when exploring different investment opportunities. Just think—your investment journey could very well begin from understanding simple math and the power it holds in shaping financial futures.

In conclusion, explore the dividend landscape with a purposeful mindset. You're not just crunching numbers; you're shaping your financial destiny. Who knew that a little math could lead to significant insights? Now, go ahead and confidently face those finance questions—in class and beyond!