Question

GIVING 100 POINTS

The Buzz Tool Company issued 1,000 shares of common stock.

If the total value of this issue was $50,000.00, what's the par value of each share?

If the Buzz stock is quoted at 491⁄4, what's the market price?

Is the Buzz stock selling above or below par?

If the Buzz Tool Company has just declared an annual dividend of $5.00 per share, what will the dividend be on 20 shares?

Suppose you paid 411⁄8 for 72 shares of Buzz stock and sold them at 491⁄4. The total brokerage fee was 1⁄8 dollar per share and all other charges amounted to $32.52.
a. What was the amount of your profit?
b. What was the percent of profit, based on your investment?

State whether each of the following is primarily a savings (S), investment (I), or retirement (R) device by assigning the appropriate letter to each.
a. Corporation bonds
b. IRA
c. US Series EE bonds
d. Savings account
e. Common stock
f. Mutual funds
g. Credit union
h. Savings and loan association

Answer 1

1.$50,000.00 ÷ 1,000 = $50.00

2.$49.25

3.Below par, because the par value is $50.00

4.$5.00 × 20 = $100.00

5. the Picture

6. a. I

b. R

c. S

d. S

e. I

f. I

g. S

h. S

Explanation:

Answer 2

1. $50,000.00 ÷ 1,000 = $50.00

2. Below par, because the par value is $50.00

3. $5.00 × 20 = $100.00

4. $49.25

5. Initial investment:
$41.125 × 75 = 2,961.00
Selling Price:
$49.25 × 72 = $3,546.00
Total brokerage fee:
$0.125 × 72 = $9.00
Total expenses:
$9.00 + $ 32.52 = $41.52
a. Profit: $3,546.00 - $41.52 - $2,961.00 = $543.48
b. Percent: $543.48 ÷ $2,961.00 = 0.1835, or 18.4%

6. a. I
b. R
c. S
d. S
e. I
f. I
g. S
h. S