Income on 12% stock from a given nominal holding Find the annual income on 12% stock if the nominal holding is $60,000 (shares purchased at $110, but price is irrelevant for the dividend).

Introduction / Context:
Dividend income depends solely on the nominal (face) value held and the declared dividend percentage. The purchase price does not affect the dividend amount, only the yield on investment.

Given Data / Assumptions:

• Nominal holding = $60,000
• Dividend rate = 12% per annum

Concept / Approach:
Income = dividend% * nominal value. Buying at $110 would impact yield but not the dividend cash received.

Step-by-Step Solution:
Income = 12% of 60,000 = 0.12 * 60,000 = $7,200

Verification / Alternative check:
10% of 60,000 = 6,000; adding 2% (1,200) gives 7,200.

Why Other Options Are Wrong:
$7,500 and $7,400 imply different percentages; $8,200 and $7,000 are not 12% of $60,000.

Common Pitfalls:
Using the market price to compute dividend instead of the nominal holding.

Final Answer:
$ 7200