A man owned 75 shares of stock worth $50 each. The corporation declared a dividend of 8 percent payable in stock. How many shares did he then own? 81 shares but how?

Answer 1

value of original stock = 75(50) = 3750
after increase of 8%, the value is 3750(1.08)
= 4050

number of shares = 4050/50 = 81