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 sum of the first 50 odd numbers?
+
What is the limit as x approaches 3 of (2x^2 - 5x + 1)?
+
Math question: "Find the absolute extrema of the function f(x) = x^3 - 3x^2 - 9x on the interval [-2, 4]."
+
New questions in Mathematics
A=m/2-t isolate t
Two fire lookouts are 12.5 km apart on a north-south line. The northern fire lookout sights a fire 20° south of East at the same time as the southern fire lookout spots it at 60° East of North. How far is the fire from the Southern lookout? Round your answer to the nearest tenth of a kilometer
Imagine that you are in an electronics store and you want to calculate the final price of a product after applying a discount. The product you are interested in has an original price of $1000 MN, but, for today, the store offers a 25% discount on all its products. Develop an algorithm that allows you to calculate the final price you will pay, but first point out the elements.
Given the vectors: a = (2m – 3n, 4n – m) and b = (2, -3), find the values of m and n that make: a = 5 b.
A food delivery company charges on average a delivery fee of $5 per order (including food and shipping) and has monthly fixed costs of $600. If the average cost of each meal delivered that is revenue for the company is $10 and the company has a monthly profit of $800, how many orders must they deliver per month?
In a normally distributed data set a mean of 31 where 95% of the data fall between 27.4 and 34.6, what would be the standard deviation of that data set?
The miles per gallon (mpg) for each of 20 medium-sized cars selected from a production line during the month of March are listed below. 23.0 21.2 23.5 23.6 20.1 24.3 25.2 26.9 24.6 22.6 26.1 23.1 25.8 24.6 24.3 24.1 24.8 22.1 22.8 24.5 (a) Find the z-scores for the largest measurement. (Round your answers to two decimal places.) z =
Solve this mathematical problem if 3/5 of a roll of tape measures 2m. How long is the complete roll?
41/39 - 1/38
5.- From the probabilities: 𝐏(𝐁) = 𝟑𝟎% 𝐏(𝐀 ∩ 𝐁) = 𝟐𝟎% 𝐏(𝐀 ̅) = 𝟕𝟎% You are asked to calculate: 𝐏(𝐀 ∪ 𝐁)
How many anagrams of the word SROMEC there that do not contain STROM, MOST, MOC or CEST as a subword? By subword is meant anything that is created by omitting some letters - for example, the word EMROSCT contains both MOC and MOST as subwords.
v Is the following statement a biconditional? If Shannon is watching a Tigers game, then it is on television.
A recurring sequence is one where elements repeat after completing one standard. If the sequence AB8C14D96AB8C1... is recurring its twentieth term is equal to: (A) B. (B) 8. (C) A. (D) 6. (E) D.
A car travels 211 miles on 15 gallons of gasoline. The best estimate of the car’s miles per gallon is?
A tree cast a shadow of 26 meters when the angle of evaluation of the sum is 24°. Find the height of the tree to the nearest meter
Let x be an integer. Prove that x^2 is even if and only if is divisible by 4.
To get to a hotel on the hill you have to travel 6 km of uphill road and every kilometer there are 6 sharp curves. Each of the sharp curves is marked by three traffic signs. How many traffic signs are there on the stretch of road that leads to the arbergi?
How many cards do you expect to pull from a poker deck until you get an ACE?
Find the distance from the point (2,-1) to the line 2x-5y+10=0
A person travels by car from one city to another with different constant speeds between pairs of cities. She drives for 55.0 min at 100.0 km/h, 14.0 min at 65.0 km/h, and 45.0 min at 60.0 km/h and spends 20.0 min eating lunch and buying gas. (a) Determine the average speed for the trip.