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 Post subject: need help with a business math question!!!!Posted: Sat, 6 Nov 2010 19:09:53 UTC
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Joined: Sat, 6 Nov 2010 19:01:10 UTC
Posts: 1
Can anyone here help me with a business mathematics question.... ( you are considering purchasing shares of gold corp. The company has stated that they will pay a dividend of \$2.25 per share every 3 months starting 2.5 years from now! If the interest rate is 12.18% compounded semi anually, what woud you be willing to pay for one share today..... I have an exam next week and she didnt teach us this style.. im so stuck and have so much mth to get done today.. can someone please help me!

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 Post subject: Re: need help with a business math question!!!!Posted: Sat, 6 Nov 2010 23:28:41 UTC
 Member of the 'S.O.S. Math' Hall of Fame

Joined: Sun, 24 Jul 2005 20:12:39 UTC
Posts: 3695
Location: Ottawa Ontario
Not too familiar with shares et al, but I don't think you're given sufficient
information; as it is, you buy a share today (when rate is 12.18% cpd s/a),
and 2.5 years from now, you'll have 100 + 2.50 available:
so PV is 102.50 / 1.0609^5 = 76.0836....

Sorry, that's all I can do for you; hope a share expert comes along!

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 Post subject: Posted: Sat, 11 Dec 2010 11:05:01 UTC
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Joined: Tue, 13 Mar 2007 09:00:13 UTC
Posts: 534
I would need to know what return you desire on your investment, and over which time period.

Work it backwards. Imagine you were going to pay \$100 per share.
Then calculate your return over a period of time, say 10 years.
Now calculate the return.

To answer her question, use this result and re-create the question according to your assumptions.

Ex.
I would be willing to pay \$100 for these shares to insure me y% return over 10 years.
Or something like that.

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 Post subject: Re: need help with a business math question!!!!Posted: Wed, 19 Oct 2011 17:09:59 UTC
 S.O.S. Newbie

Joined: Wed, 19 Oct 2011 17:06:42 UTC
Posts: 1
use the formula F=P(1+1/n)^nxt

where n is compounded semi annually = 1/2
t = years

F= future worth
p=present worth

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 Post subject: Re: need help with a business math question!!!!Posted: Wed, 19 Oct 2011 17:25:55 UTC
 Member of the 'S.O.S. Math' Hall of Fame

Joined: Sun, 24 Jul 2005 20:12:39 UTC
Posts: 3695
Location: Ottawa Ontario

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