ABC Corporation issues a 1-for-5 bonus share. If an investor owns 100 shares before the bonus issue, how many shares will they own afterwards?a.120b.20c.80d.125
Question
ABC Corporation issues a 1-for-5 bonus share. If an investor owns 100 shares before the bonus issue, how many shares will they own afterwards?a.120b.20c.80d.125
Solution
A 1-for-5 bonus share means that for every 5 shares an investor owns, they receive 1 additional share.
Step 1: Determine how many sets of 5 shares the investor has. The investor has 100 shares, so they have 100/5 = 20 sets of 5 shares.
Step 2: For each set of 5 shares, the investor gets 1 bonus share. So, the investor gets 20 * 1 = 20 bonus shares.
Step 3: Add the bonus shares to the original number of shares. The investor originally had 100 shares, so after the bonus issue, they have 100 + 20 = 120 shares.
So, the answer is a. 120.
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