Investing: Lesser-Known Stocks Exercises 19 and 20 are based on the following information about the stocks of Whitestone REIT, HCC Insurance Holdings, Inc, and SanDisk Corporation:^{18}
Price ($) | Dividend Yield (%) | |
WSR (WSR Whitestone REIT) | 16 | 7 |
HCC (HCC Insurance Holdings, Inc.) | 56 | 2 |
SNDK (SanDisk Corporation) | 80 | 2 |
You invested a total of $11,200 in shares of the three stocks at the given prices and expected to earn $304 in annual dividends. If you purchased a total of 250 shares, how many shares of each stock did you purchase?
To calculate: The shares purchased of all three stocks. The price and the dividend yield is given the following table.
Price ($) | Dividend Yield (%) | |
WSR (WSR Whitestone REIT) | 16 | 7 |
HCC (HCC Insurance Holding, Inc.) | 56 | 2 |
SNDK (SanDisk Corporation) | 80 | 2 |
It is given that the total investment is $11200, and expected earnings are $304. The total number of shares purchased is 250.
Given Information:
The price and the dividend yield is given the following table.
Price ($) | Dividend Yield (%) | |
WSR (WSR Whitestone REIT) | 16 | 7 |
HCC (HCC Insurance Holding, Inc.) | 56 | 2 |
SNDK (SanDisk Corporation) | 80 | 2 |
It is given that the total investment is $11200, and expected earnings are $304. The total number of shares purchased is 250.
Formula Used:
Elimination method:
In this method, we first combine the equations in a way such that one of the variables gets eliminated. Then we substitute this obtained value in either of the equation to get the value of the other variable.
Calculation:
Let the stocks purchased of WSR, HCC, and SNDK be
The given statement tell that the total investment is $11200.
Investment in share x is at the price of $16, thus
Investment in share y is at the price of $56, thus
Investment in share z is at the price of $80, thus
Therefore, the total investment can be given by
Also, the given statement tell that the expected earning is $304.
Dividend in share x is at the percentage of 7%, thus dividend can be given by 7% of
Dividend in share y is at the percentage of 2%, thus dividend can be given by 2% of
Dividend in share z is at the percentage of 2%, thus dividend can be given by 2% of
Therefore, the total dividend can be given by:
And total stocks purchased are 250.
Thus,
Apply the elimination method to find the solution of the given system of the equations:
Multiply equation (3) with 1.6 to eliminate z.
Now subtract the second equation from fourth to eliminate z.
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