Results 1 to 5 of 5

Math Help - Stock and price problem please help.

  1. #1
    Member
    Joined
    Aug 2012
    From
    Utah
    Posts
    94

    Stock and price problem please help.

    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?
    Follow Math Help Forum on Facebook and Google+

  2. #2
    MHF Contributor
    Joined
    Sep 2012
    From
    Australia
    Posts
    4,186
    Thanks
    772

    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?
    Follow Math Help Forum on Facebook and Google+

  3. #3
    MHF Contributor

    Joined
    Apr 2005
    Posts
    16,455
    Thanks
    1868

    Re: Stock and price problem please help.

    Quote Originally Posted by hisajesh View Post
    A person has 3 percent stock which yields $240 a year. He sells out 1/4 of the stock at
    Isn't there something missing here?

    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)?
    Follow Math Help Forum on Facebook and Google+

  4. #4
    Member
    Joined
    Aug 2012
    From
    Utah
    Posts
    94

    Re: Stock and price problem please help.

    Here is the forumals and definitions used:
    Dividend: Dividend is expressed as a percentage of the face value. (face value of a share is taken as $100 unless specified.)
    Income per share=Rate of dividend X face value of 1 share.
    Annual income=Income per share X Number of shares
    Let me know if you need any other info
    Follow Math Help Forum on Facebook and Google+

  5. #5
    Member
    Joined
    Aug 2012
    From
    Utah
    Posts
    94

    Re: Stock and price problem please help.

    @ Halls Of Ivy: $240 will get split in to $60 and the increase is 60+40=$100.
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Price of stock (present value)
    Posted in the Business Math Forum
    Replies: 7
    Last Post: June 13th 2011, 11:37 AM
  2. Finance Help - Stock Price
    Posted in the Business Math Forum
    Replies: 2
    Last Post: November 2nd 2009, 06:26 PM
  3. Probability of a stock price
    Posted in the Advanced Statistics Forum
    Replies: 0
    Last Post: October 19th 2009, 06:32 PM
  4. Probability-Stock Price
    Posted in the Statistics Forum
    Replies: 3
    Last Post: February 28th 2008, 05:48 AM
  5. Replies: 1
    Last Post: September 29th 2005, 10:47 PM

Search Tags


/mathhelpforum @mathhelpforum