Simple yet brain storming question.
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Example:
My investment account is worth $5,000,000. Investment account has 10 million shares. Each share worth $0.50.
Now John came in and buy 1 million shares with $500,000.
So now, I got JohnÂ’s $500,000. I am going to put it into the investment account and re-invest. Now investment account total is $5,500,000.
i) How much will 1 share cost now?
ii) How many shares do I have?
iii) How many shares does John have?
*** Please show your workings on how you arrive to the questions above. -
this one from GMAT ah
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Lazy to count..
But what stock you want i can sell you some..
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ummm nobody can answer?
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Aren't you dead?Originally posted by Steve Irwin:ummm nobody can answer? -
eh?Originally posted by Steve Irwin:Example:
My investment account is worth $5,000,000. Investment account has 10 million shares. Each share worth $0.50.
Now John came in and buy 1 million shares with $500,000.
So now, I got JohnÂ’s $500,000. I am going to put it into the investment account and re-invest. Now investment account total is $5,500,000.
i) How much will 1 share cost now?
ii) How many shares do I have?
iii) How many shares does John have?
*** Please show your workings on how you arrive to the questions above.
i) share still cost $0.50 mah.. got change meh?
ii) u got 11 million shares lor..
iii) John give u already mah... unless u refer to urself in 3rd person (and u r John), then John dun have any more.
trick question izzit...
I very simple minded one
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$0.50
11 million
I think so.
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broker or lawyers fees how? taxes how?Originally posted by Steve Irwin:Example:
My investment account is worth $5,000,000. Investment account has 10 million shares. Each share worth $0.50.
Now John came in and buy 1 million shares with $500,000.
So now, I got JohnÂ’s $500,000. I am going to put it into the investment account and re-invest. Now investment account total is $5,500,000.
i) How much will 1 share cost now?
ii) How many shares do I have?
iii) How many shares does John have?
*** Please show your workings on how you arrive to the questions above. -
erm...Originally posted by Steve Irwin:Example:
My investment account is worth $5,000,000. Investment account has 10 million shares. Each share worth $0.50.
Now John came in and buy 1 million shares with $500,000.
So now, I got JohnÂ’s $500,000. I am going to put it into the investment account and re-invest. Now investment account total is $5,500,000.
i) How much will 1 share cost now?
ii) How many shares do I have?
iii) How many shares does John have?
*** Please show your workings on how you arrive to the questions above.
i tink...
1) $0.55
investment account has 10million shares worth $5million
add $500k into the $5m does not mean the shares will increase by 1m
so 10m shares divided by $5.5m is $0.55/shares
2) 10million
you only have 10m shares and you put in $500k which means u didn't buy another $500k, so ur shares just increased $0.05/shares
3) 1million
john only bought 1m shares, and the shares price increase doesn't mean his shares amount increase.
erm...
isit correct?
LoL...
tink i've been typin rubbish here...
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Wrong. If 1 share becomes $0.55 and total is 10 million shares, that means you own 9 million shares and John owns 1 million shares. So let's do the maths.Originally posted by NuTcRaCk:erm...
i tink...
1) $0.55
investment account has 10million shares worth $5million
add $500k into the $5m does not mean the shares will increase by 1m
so 10m shares divided by $5.5m is $0.55/shares
2) 10million
you only have 10m shares and you put in $500k which means u didn't buy another $500k, so ur shares just increased $0.05/shares
3) 1million
john only bought 1m shares, and the shares price increase doesn't mean his shares amount increase.
erm...
isit correct?
LoL...
tink i've been typin rubbish here...
You says 1 shares cost $0.55 after I put the $500,000 in and account becomes $5.5 million worth right.
i) I own 9 million shares = $0.55 x 9 mil = $4,950,000
ii) John owns 1 million shares = $0.55 x 1 mil = $550,000
which means if I sell John 1 million shares, I will lose money. It's like I give John 1 million shares plus $50,000 for free. You don't do a losing business. you want investor to comes in and make even more %profit. C'mon think hard. This is a million dollar question which requires a very high financial IQ to answer. -
Well presuming John bought 1million shares from you, hence why you have his $500k.Originally posted by Steve Irwin:Example:
My investment account is worth $5,000,000. Investment account has 10 million shares. Each share worth $0.50.
Now John came in and buy 1 million shares with $500,000.
So now, I got JohnÂ’s $500,000. I am going to put it into the investment account and re-invest. Now investment account total is $5,500,000.
i) How much will 1 share cost now?
ii) How many shares do I have?
iii) How many shares does John have?
*** Please show your workings on how you arrive to the questions above.
i) However, your base investment acct still have value of $5 million for 9million shares. Each share cost $0.56.
ii) You have 9 million share after selling 1 million away(presuming you have not invest the $500k).
iii) John have 1million shares that he bought.
Haha i am noob at this. Anyways, what is the correct answer? -
What a good way to do homework.
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Am assuming you and John are both traders/investors.
Since John bought 1 million shares from you at the same buy price as you, that is $0.50. Then you will end up with $4.5 million in shares and $0.5 million in cash. So you still end up the same. Am i correct? -
Oh btw, theres an error in your question. You don't end up with 5.5 million because in exchange for the 0.5 million in cash, you have to reduce your shareholdings by 0.5 million.