Business Math Lesson 15: stocks, part 4
Channel: Amy Goldlist
Date: 27/05/2021

4. You purchase some preferred shares that have a semi-annual dividend of $1.25.  How much should you pay for the shares if the interest rate is 5% compounded semi-annually and the first dividend is in 6 months?

 

5. You purchase the shares in Q.4 for $50 and the interest rate rises to j2 =8%. 

How much would you make or lose? (assume the first dividend is still in 6 months)
How much money would you make or lose if the interest rate was 6% effective?  (assume the first dividend is still in six months)