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)
Question: What is the derivative of ∫[a to x] f(t) dt, where f(x) = 3x^2 - 2x + 1 and a is a constant? (
+
What are the solutions of the equation x^3 - 2x^2 + x - 3 = 0?
+
Find the value of cos(45°) × sin(60°) × tan(30°) - sec(120°)
+
New questions in Mathematics
A normally distributed population has a mean of 118 with a standard deviation of 18. What score separates the lowest 72% of the distribution from the rest of the scores?
What payment 7 months from now would be equivalent in value to a $3,300 payment due 23 months from now? The value of money is 2.7% simple interest. Round your answer to 2 decimal places. Show all work and how you arrive at the answer..
7273736363-8
what is the annual rate on ​$525 at 0.046​% per day for 3 months?
4x-3y=5;x+2y=4
7/6-(-1/9)
The durability of a tire of a certain brand is a Normal random variable with an average of 64,000 km and a standard deviation of 9,000 km. Assuming independence between tires, what is the probability that the 4 tires on a car will last more than 58,000 km?
show step by step simplification: (¬𝑑∨((¬b∧c)∨(b∧¬c)))∧((𝑎 ∧ 𝑏) ∨ (¬𝑎 ∧ ¬𝑏))∧(¬𝑐∨((¬𝑑∧𝑎)∨(𝑑∧¬𝑎)))
John he’s going to the carnival with his friends. He spends $25 on an admission ticket. He buys 10 games at X dollars each and two boxes of popcorn at Y dollars each. Write an expression to show the total cost of admission game, tickets and popcorn.
The two sides of the triangle are 12 cm and 5 cm, and the angle between the sides is 60°. Cover the area of ​​the triangle!
1. A capital of $3,831 was lent, and it has produced interest of $840 from 05-12-2022 to 1-12-2023. At what annual simple interest rate was the capital lent?
Two particles of electrical charges Q1=3.8×10-⁶C and q,=4.4×10-⁶C are separated in vacuum by a distance of 4.0.10-⁸ m. Since K=9.0.10⁹ N.m²/C², the intensity of the interaction force between them, in newtons, is?
48 kg of 30% sulfuric acid in a mixture of 10% and 40% sulfuric acid arose. How many kilograms were each of the original solutions?
A 20,000 kg school bus is moving at 30 km per hour on a straight road. At that moment, it applies the brakes until it comes to a complete stop after 15 seconds. Calculate the acceleration and the force acting on the body.
What is the total amount due and the amount of interest on a 3-year loan of $1,000 at a simple interest rate of 12% per year?
If sin A=0.3 and cos A=0.6, determine the value of tan A.
x²-7x+12=0
9n + 7(-8 + 4k) use k=2 and n=3
12[4 + (8 + 7) + 5]
Mark is gluing a ribbon around the sides of a picture frame. The frame is 11 inches long and 7 includes wide. How much ribbon does Mark need?