A person has 3 percent stock which yields $240 a year. He sells out 1/4 of the stock at and invests the proceeds in Railway stock at$174.5. What dividend should the latter pay so that he may thereby increase his oncome to $40? 2. ## Re: Stock and price problem please help. Hey hisajesh. Can you show us a model for dividend payment and use that to derive the parameter of interest? 3. ## Re: Stock and price problem please help. Originally Posted by hisajesh A person has 3 percent stock which yields$240 a year. He sells out 1/4 of the stock at
and invests the proceeds in Railway stock at $174.5. What dividend should the latter pay so that he may thereby increase his oncome to$40?
"oncome"? He earlier had an income of $240 dollars a year. Even if here were to sell 1/4 and not replace it he would still have (3/4)(240)=$180. Did you mean increase his income by $40 (to$280)?