Question

please walk me through the rest of the problems

When you purchase a share of stock, you become a part owner of the company that issues the stock. The total amount you pay for the stock depends on the cost per share, the number of shares you purchase, and the stockbroker's commission. When you buy stock, you may receive dividends. If you consider annual dividends an important factor in investing, you can use the annual yield to compare different stocks as investments COST OF STOCK = NUMBER OF SHARES X COST PER SHARE TOTAL PAID = COST OF STOCKS + COMMISSION ANNUAL YIELD - ANNUAL DIVIDEND PER SHARE COST PER SHARE 1. Emma Elliot purchased 400 shares of Zony Electronics at $19 per share and paid a 2% commission. a. What was the cost of the stock? b. What was the total paid? 2. Arthur McCrag purchased 320 shares of the Atlas Paper Company. He paid a 7.00% commission to the stockbroker. The stocks cost him $42 per share. 400 x 19 7600 7752 $10080 a. How much did the stock cost? 4 10756 320 x 42 4 blon80 +7% 07 DS + b. What was the total paid? 3. Alison Louis owns 90 shares of Allied Farm Chemicals for which she paid S49.60 per share. The company paid annual dividends of $4.08 per share. What is the annual yield? 4. Arthur Delta owns 60 shares of Comp-Tronics for which he paid $3945.90. The S3945.90 includes a commission of S113.40. Comp-Tronics paid annual dividends of S7.58 per share. What is the annual yield? 5. You are considering the purchase of either 100 shares of Data Control Corporation at 65.50 per share or 80 shares of Mini-Computer Limited at $74.25 per share. Data Control is expected to pay annual dividends of $6.40 per share, while Mini-Computer Limited is expected to pay $8.88 per share. a. If you bought the 100 shares of Data Control Corporation, what would you receive in annual dividends? b. What would your annual yield be? c. If you bought 80 shares of Mini-Computer Limited, what would you receive in annual dividends? d. What would your annual yield be? 6. Mario Gillespie owns 50 shares of Consolidated Industries for which he paid 592.625 per share and a 4% commission. Consolidated Industries paid annual dividends of $4.68 per share. What is the annual yield? 76 • Unit 10 Copyright by Giancee

Answer 1

2a). Cost of the stock = number of shares bought*price per share = 320*42.75 = 13,680

b). Total paid = cost of the stock + commission

= cost of the stock + 7%*cost of the stock = 13,680*(1+7%) = 14,637.60

3). Annual yield = annual dividend/price per share = 4.08/49.60 = 8.23%

4). Cost per share = (total amount paid-commission)/number of shares bought = (3,945.90-113.40)/60 = 63.875 per share

Annual yield = annual dividend/cost per share = 7.56/63.875 = 11.84%

5a). Annual dividends = number of shares*dividend per share = 100*6.40 = 640

b). Annual yield = annual dividend/price per share = 6.40/65.50 = 9.77%

c). Annual dividends = 80*8.88 = 710.40

d). Annual yield = 8.88/74.25 = 11.96%

6). Annual yield = 4.68/92.625 = 5.05%