19. For what sum must I give my note for 60 days at a bank in order to receive $650 proceeds, money being worth 8% ? 20. Find the face of a note, discounted for $2558.40 at 8%, for a term of 72 days, without grace. STOCKS AND BONDS. 310. Many kinds of business require so much capital that several persons must unite to raise the necessary amount. 311. The Capital to be raised is divided into Shares, usually of $100 each. Shares are then sold until the required amount is raised. Each purchaser of shares is a Stockholder, and receives a Certificate of Stock, which shows the number of shares purchased, and their value. This value is called the Par or Nominal Value. 312. The Market Value of stocks is the price for which they are sold. 313. The value of stocks depends upon the profitableness of the business. When the business is very profitable. the shares are worth more than par; they are then above par, or at a Premium. When the business is unprofitable, the shares are not worth their par value. They are then below par, or at a Discount. 314. 1. The capital of a company is $100000. Into how many shares of $100 each can this be divided? 2. A stockholder owns 25 shares of stock. dollars of stock has he? How many 3. If at the end of a year there has been a net profit of $10,000, what per cent profit has been made ? $10000 is what % of $100000 ? The profits are divided among the stockholders, and are called Dividends. NOTE 1. quarterly. Dividends are usually declared semi-annually or NOTE 2. When a 10% dividend is declared, each stockholder receives 10% of the par value of his shares. 4. What will be A's dividend if he owns 35 shares? When there is a loss, each stockholder is required to pay his share of the loss. This is called an Assessment. 5. What would be A's assessment to meet a 2% loss? A person who buys or sells stocks for others is called a Stock-broker, and his commission is called Brokerage. NOTE 1.- Brokerage is usually % or 3% of the par value. NOTE 2. In all stock transactions, dividends, assessments, brokerage, premium, and discount are computed on the par value. NOTE 3. - Shares are sometimes issued at $200, $250, $50, $25, or $10 each, but unless otherwise stated $100 is considered the par value of a share. 6. What is the market value of 10 shares of bank stock, when sold at par? 7. What is the market value of 50 shares of railroad stock, at 10% premium? SOLUTION. - The market value of 1 share is $100 + $10 = $110. The market value of 50 shares is 50 times $110. 8. What is the market value of 18 shares of mining stock at 15% below par? SOLUTION. — The value of 1 share is $100 - $15 = $85. Stock Quotations are the published prices of stocks. When railroad stock is quoted at 108, it means that it sells for 8% above par in the stock-market. When it is quoted at 92, it is selling at 8% below par. 9. If I buy stock at 98 and sell it at 101, what gain do I make on 10 shares? NOTE. Stock at 98 means $98 for a $100 share, and stock at 101 means $101 for a $100 share. 10. When stock is quoted at 85, what is the value of a share? What is the value of 1 dollar of stock? 11. What must I pay for 10 shares of stock at 95, if I pay the broker 4% for doing the business? 12. If I sell 10 shares of stock at 110, and pay the broker %, what do I receive? SOLUTION. — 1 share brings $110 $ = $109, or $109.75. 10 shares bring 10 times $109.75 $1097.50. Ans. 13. A man invested $4500 in street railway stock at 10% discount. How many shares did he purchase? 14. If I invest $2100 in bank stock at 105, how many shares do I purchase? 15. A capitalist bought 80 shares railroad stock at 87, and 60 shares mining stock at 114. Find the cost. 16. $18200 will purchase how many shares of stock selling at 140 ? 17. A stock company declares a dividend of 2%. What does A receive, who owns 1500 shares of $10 each? 18. How much is gained on 50 shares of railroad stock purchased at 98 and sold at 102 ? 19. Bought stock at a discount of 2%, and sold it at a discount of 3%. Did I gain or lose? and how much on 20 shares? BONDS. 315. To meet extraordinary expenses, governments, States, cities, villages, counties, towns, and incorporated companies sometimes borrow money. The securities given by such corporations are called Bonds. Bonds bear a fixed rate of interest, payable annually, semi-annually, or quarterly. They are bought and sold in the same manner as stocks. Bonds are known by the rate of interest they bear: Virginia 6's are bonds of the State of Virginia, bearing 6%; U. S. 4's of '97 are U. S. bonds bearing 4% interest, and maturing in 1897. 316. A Coupon is an interest certificate attached to a bond. At the expiration of any interest period, the coupon is cut off and used in collecting the interest, being worth the amount of interest due on the bond for a specified period. 317. 20. What will be the cost, including brokerage at 4%, of 200 shares of C., B., and Q. R.R. bought at 677 ? $68. Cost of 200 SOLUTION. Cost of 1 share $673 + $1 21. How much, including brokerage at %, must be paid for $5000 of U. S. 4's at 1107? SOLUTION. = - $1 of bonds costs $1.10 + .00 $1.11. $5000 worth will cost 5000 times $1.11. 22. What must I pay for $8275 of stock at 10% discount? 23. What is the cost, including broker's commission of 4%, of 150 shares of railroad stock bought at 891? 24. I buy stocks at 5% discount, and sell at 5% premium; what per cent profit do I make on the investment? 25. March 10, 1896, Western Union Telegraph stock was How many shares could be bought for quoted at 843. $1020, brokerage per cent? SOLUTION. Cost of 1 share, $843 + } $85. As many shares can be purchased as $85 is contained in $1020. 26. How many shares of stock at 10% premium can be purchased for $2200? 27. I invested $5100 in N. Y. and N.H. railroad stock at 170. How many shares did I purchase? 28. If I invest $42400 in 5% bonds at 106, what is my yearly income? SOLUTION. $42400 $1.06 5% of $40000 ? = $40000, par value. How much is 29. If I invest $21008 in 5% bonds at 104, what will be my annual income? 30. What will be my yearly income if I invest $11100 in 5% at 92, brokerage %? 31. A man invests $9500 in Virginia 6's at 943, brokerage 1%. What is his quarterly income? 32. What will be my annual income if I invest $5050 in 4% water bonds at 1% premium? 33. What is my dividend on 80 shares of electric-light stock, when a 5% dividend has been declared? 34. What sum must be invested in Chicago 5's at 92 to yield an income of $600, brokerage % ? = SOLUTION. $600.05 $12000, par value. How much is 92% of $12000 ? 35. How much must I invest in 4% bonds at 8% premium, to secure an annual income of $200 ? |