Problem regarding the dividend reinvestment plan

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Reference no: EM13991096

Determine Rona's gross income from the following items she receives during the current year:

Interest on savings account

$300

Dividends on Microsoft stock

200

Interest on Guam development bonds

2,000

Dividend on life insurance policy

200

(The company is a mutual life insurance company, and the dividend is a return of part of the premium she paid on the policy.)

In addition, Rona owns 1,000 shares of Cochran Corporation common stock. Cochran has a dividend reinvestment plan through which stockholders can receive a stock dividend equal to 4% of their holdings in lieu of a cash dividend of equal value. Rona takes the 40 shares of stock, which are worth $3 per share.

Reference no: EM13991096

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