# Homework Help: How to Calculate Stock Prices?

1. Nov 27, 2015

### Embison

• Poster has been reminded that all schoolwork-type questions go in HH and work must be shown
If you invest $10,000 at .50c a stock and cashout when the stock price hits$100, how much would you make?

If you invest $10,000 at$2.50 a stock and cashout when the stock price hits $125, how much would you make? If you invest$10,000 at $10 a stock and cashout when the stock price hits$650, how much would you make?

And can you explain how to do the math? I have no idea how to figure out the totals.

Thank you for any help!!

2. Nov 27, 2015

### BvU

Perhaps it's easier to do it per 'stock' ? You invest 50 c (.50 c seems too cheap ?) and sell for $100 so you make$ 99.50 per unit. For $10000 you can buy 20000 shares at 50 c, so then you would make 20000 shares x$ 99.50 /share = 1990000 in your dreams !

Don't try this at home: if you can't do the math it's much better to stay clear of the stock market !

3. Nov 27, 2015

### Embison

Thank you for helpin me out. I really appreciate it!

4. Nov 27, 2015

Isnt the easiest and fastest way to do it like this? $100 divided by .50c = 200 multiplied by$10,000 = $2,000,000 5. Nov 27, 2015 ### BvU Yes, but the 2 M isn't earnings: it is earnings + investment. For this example the difference is small, in practice you will need a very very big investment to earn$ 1990000 !

6. Nov 27, 2015

### Embison

I wasnt talking about the $2,000,000 total I was talking about the equation itself. I can just include minus$10,000 at the end of what I wrote. I was saying isnt the way I did the equation much simpler and easier to follow than the way you did yours?

7. Nov 27, 2015

### BvU

Yes. The mere fact that you asked the question made me tread very carefully. It's really very simple arithmetic either way.

8. Nov 27, 2015

### SteamKing

Staff Emeritus
Stocks which sell for less than $1.00 / share are known as 'penny stocks'. These companies are not traded on most of the familiar stock exchanges (which set minimum share prices for a stock to remain listed on the exchange) and are highly speculative. 9. Nov 27, 2015 ### BvU In 'general math' and in dreams everything is possible 10. Nov 27, 2015 ### Ray Vickson Do you really mean .5c per stock in the first case? That is 1/2 cent per stock! Did you mean$.5 = 50c per stock?

11. Nov 27, 2015

### BvU

From the book answer my money is on the half dollar. A sure bet

 it's too late; I'm mixing up threads !!!

12. Nov 27, 2015

### Ray Vickson

No: $100 $\div$ .5 c =$20,000. If you mean $100 $\div$ 50c =$200, then that is what you should write.

Lesson: years ago in a town I lived in at the time, a supermarket published ads in the newspaper announcing a sale price of .5c per lb. on some grocery item (I forget what). I think that somebody must have arrived with a truck, filled it up with the sale item, and given the store $10 (instead of$2000); because that was the advertised price, the store had to honor the announcement. From that time onward the store never, ever made that error again, and nor should you.