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How many shares of stock should the club buy for its investment?

Karen H asked:


Investment Club.

An investment club bought a bond of an oil corporation for $5000. The bond yields 8% per year. The club now wants to buy shares of stock in a hospital supply company. The stock sells at $20 per share and earns a dividend of $0.50 per share per year. How many shares should the club buy so that its total investments in stocks and bonds yield 5% per year?

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This entry was posted on Saturday, February 6th, 2010 at 2:20 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

One Response to “How many shares of stock should the club buy for its investment?”

  1. harpo3 Says:
    February 7th, 2010 at 1:43 am

    You would have to invest $5770 in the stock, or 289 shares.