Money Cook

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

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?

Public Comments

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