EXAMPLE: Find cost of 65 shares of bank stock, at $107 per share, or 7%
premium. Also of 48 shares of railroad stock, at $87-1/2 per share, or
12-1/2% discount.
(1) 65 × 107 = 6955. _Ans._ $6955.
(2) 48 × 87-1/2 = 4200. _Ans._ $4200.
2. To find what rate per cent is realized by investing in stocks or
bonds when above or below par.
RULE.--_Annex two ciphers to the fixed rate per cent, and divide by the
cost per share._ Or by proportion: _As the cost per share is to the
fixed rate, so is 100 to the required rate_.
EXAMPLE: Mr. Warren bought ten shares of Illinois Central Railroad stock
at 96. What does he get when a dividend of 6% is declared? What per cent
is that on his investment?