Question

A hobbyist buys 300 Kone shares at a price of €30/piece. The share pays a dividend of €1/share first and €1.15/share the following year. The hobbyist sells the shares for €37/share. Calculate the hobbyist's return when a 0.2% trading fee is charged for buying and selling stocks. A 30% tax is paid on capital income and 30% is tax-free on dividends.

90

likes
449 views

Answer to a math question A hobbyist buys 300 Kone shares at a price of €30/piece. The share pays a dividend of €1/share first and €1.15/share the following year. The hobbyist sells the shares for €37/share. Calculate the hobbyist's return when a 0.2% trading fee is charged for buying and selling stocks. A 30% tax is paid on capital income and 30% is tax-free on dividends.

Expert avatar
Rasheed
4.7
110 Answers
"To calculate the hobbyist's total return, we need to account for the initial purchase, the dividends received in two years, the sale of the shares, trading fees, and taxes on both capital gains and dividends. Here's how to break it down:

1. **Initial Purchase:**
- The hobbyist buys 300 shares at €30 each.
- There's a 0.2% trading fee for buying.

The total cost of purchasing 300 shares at €30 each with a 0.2% trading fee is:
300 \times 30 + 0.002(300 \times 30) = 9000 + 18 = 9018 \text{ euros}

2. **Dividends Received:**
- In the first year, a dividend of €1/share is received.
- In the second year, a dividend of €1.15/share is received.
- 30% of the dividends are tax-free, and the remaining 70% is taxed at 30%.

The net dividends received after taxes for the first and second years combined are:
300 \times (1 + 1.15) \times 0.3 = 509.55 \text{ euros}

3. **Sale of Shares:**
- The hobbyist sells the shares at €37 each.
- There's a 0.2% trading fee for selling.

The gross capital gain from selling the shares at €37 each (before taxes and selling trading fees) is:
300 \times (37 - 30) = 300 \times 7 = 2100 \text{ euros}

4. **Capital Gains Tax:**
- The difference between the sale price and the purchase price, minus the selling trading fee, is subject to a 30% capital gains tax.

The net capital gain, after accounting for the capital gains tax of 30% and the selling trading fee of 0.2%, is:
2100 - 30\% \times 2100 - 0.002 \times 2100 = 2100 - 630 - 4.2 = 1465.8 \text{ euros}

\textbf{Answer:} Thus, the hobbyist's total return on this investment, combining net capital gains and dividends after taxes, was approximately €1944.75.

Frequently asked questions (FAQs)
What is the derivative of the function f(x) = ∫(2x^3 + 5x + 1)dx from x = 1 to x = 4?
+
If the sine value of an angle is 0.5, what is the corresponding angle in degrees?
+
Math question: In a right triangle, one angle measures 30 degrees and one side measures 10 units. Find the length of the hypotenuse.
+
New questions in Mathematics
Find 2 numbers that the sum of 1/3 of the first plus 1/5 of the second will be equal to 13 and that if you multiply the first by 5 and the second by 7 you get 247 as the sum of the two products with replacement solution
calculate the derivative by the limit definition: f(x) = 6x^3 + 2
-8+3/5
X^2 = 25
The graph of the equation x²= 4py is a parabola with focus F(_,_) and directrix y=_____ Therefore, the graph of x²=12y is a parabola with focus F(_,_) and a directrix y=_____
Elliot opened a savings account and deposited $5000.00 as principal. The account earns 4% interest, compounded annually. How much interest will he earn after 5 years? Round your answer to the nearest cent.
If f(x) = 3x 2, what is the value of x so that f(x) = 11?
Identify a pattern in the list of numbers.Then use this pattern to find the next number. 37,31,25,19,13
4. Show that if n is any integer, then n^2 3n 5 is an odd integer
is the x element (180,270), if tanx-3cotx=2, sinx ?
Convert 78 percent to a decimal
78 percent to a decimal
Find all real numbers x that satisfy the equation \sqrt{x^2-2}=\sqrt{3-x}
form a key for your lock containing the numbers 2 2 5 8 How many different keys can you form?
A property sold for $745,000 in a co-brokered transaction. The seller has agreed to pay a 7% commission to the listing firm. The listing firm has agreed to equally split the commission with the selling firm. If the buyer’s broker will receive 8% of the selling firm’s commission, how much commission will the buyer’s broker receive? $14,900 $3725 $$37250 $18625
Oi👋🏻 Toque em "Criar Nova Tarefa" para enviar seu problema de matemática. Um dos nossos especialistas começará a trabalhar nisso imediatamente!
Evaluate ab+dc if a=56 , b=−34 , c=0.4 , and d=12 . Write in simplest form.
6(k-7) -2=5
A small box measures 10 in. by 4 in. by 6 in. high. Find the volume of the box.
Suppose a car license plate consists of 2 letters and two digits of which the first cannot be zero. How many different plates can be engraved? consider only 26 letters and 10 digits draw an example of this.