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
54 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 common characteristic shared by the exponential functions f(x) = 10^x and f(x) = e^x?
+
What is the result of multiplying a vector with components (3, -2) by a scalar factor of 5?
+
What is the range of the inverse sine function?
+
New questions in Mathematics
431414-1*(11111-1)-4*(5*3)
Since one of the three integers whose product is (-60) is (+4), write the values that two integers can take.
Determine the correct value: A company knows that invoices pending collection have a normal distribution with a mean of $1.65 million, with a standard deviation of $0.2 million, then: The probability that an invoice pending collection has an amount that is within more than 2 deviations below the mean, is:
The Lenovo company manufactures laptop computers, it is known that for every 60 laptops produced, 54 go on the market with the highest quality standards. If a sample of 15 laptops is taken, calculate the probability that: Exactly 2 are not of high quality
2. Juan is flying a piscucha. He is releasing the thread, having his hand at the height of the throat, which is 1.68 meters from the ground, if the thread forms an angle of elevation of 50°, at what height is the piscucha at the moment that Juan has released 58 meters of the thread?
Suppose 56% of politicians are lawyers if a random sample of size 873 is selected, what is the probability that the proportion of politicians who are lawyers will be less than 55% round your answer to four decimal places
How long will it take for $900 to become $5000 at an annual rate of 11.15% compounded bimonthly?
Desarrolla (2x)(3y + 2x)5
Log5 625
If A and B are any events, the property that is not always true is: a) 0 ≤ 𝑃(𝐴 ∩ 𝐵) ≤ 1 b) 𝑃(Ω) = 1 c) 𝑃(𝐵) = 1 − 𝑃(𝐵𝑐) d) 𝑃(∅) = 0 e) 𝑃(𝐴 ∪ 𝐵) = 𝑃(𝐴) + 𝑃(𝐵)
Let v be the set of all ordered pairs of real numbers and consider the scalar addition and multiplication operations defined by: u+v=(x,y)+(s,t)=(x+s+1,y+t -two) au=a.(x,y)=(ax+a-1,ay-2a+2) It is known that this set with the operations defined above is a vector space. A) calculate u+v is au for u=(-2,3),v=(1,-2) and a=2 B) show that (0,0) #0 Suggestion find a vector W such that u+w=u C) who is the vector -u D) show that axiom A4 holds:-u+u=0
A,B,C and D are the corners of a rectangular building. Find the lengths the diagonals if AB measures 38' - 9" and AD measures 56' - 3"
How to factorise 5y^2 -7y -52
A company has had the following data for two consecutive years. Total, asset item 3,100,500 euros 3,300,550 euros. Net amount of business figures 4,755,250 euros /5,100 euros Average number of workers employed during the year 64/70 You can present a balance sheet in an abbreviated form
solid obtained by rotation around the axis x = -1, the region delimited by x^2 - x + y = 0 and the abscissa axis
Cuboid containers (open at the top) should be examined with regard to their volume. The figure below shows a network of such containers (x ∈ Df). Determine a function ƒ (assignment rule and definition area D) that describes the volume of these containers and calculate the volume of such a container if the content of the base area is 16 dm². Show that this function f has neither a local maximum nor a global maximum
25) Paulo saves R$250.00 per month and keeps the money in a safe in his own home. At the end of 12 months, deposit the total saved into the savings account. Consider that, each year, deposits are always carried out on the same day and month; the annual yield on the savings account is 7%; and, the yield total is obtained by the interest compounding process. So, the amount that Paulo will have in his savings account after 3 years, from the moment you started saving part of your money monthly, it will be A) R$6,644.70. B) R$ 9,210.00. C) R$ 9,644.70. D) R$ 10,319.83. E) R$ 13,319.83
How much does 7.2 moles of ammonium dichromate weigh? (NH4)2Cr2O7
The perimeter of a rectangular rug is 42 feet. The width is 9 feet. What is the length?
If the area of a circle is 75.7ft2, what is the radius? Give the answer in metres. Round answer to 2 decimal places and enter the units.