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Scenario 1:
10
11
12
18
24
36
48
60
Asset
Loan Rate
Liability
Treasury
Bank
11.00%
11.00%
Depo Rate
4.50%
TP Liability
8.50%
TP Asset
8.50%
NRFF
2.50%
4.50%
8.50%
8.50%
4.00%
0.00%
6.50%
10.00%
8.00%
6.00%
4.00%
1
Scenario 2:
10
11
12
18
24
36
48
60
Asset
Loan Rate
Liability
Treasury
11.00%
11.00%
Depo Rate
4.50%
TP Liability
7.00%
TP Asset
8.50%
NRFF
2.50%
Bank
4.50%
7.00%
8.50%
2.50%
1.50%
6.50%
Stocks
Stock Market
STOCKS
Stocks are shares of ownership in a corporation.
Stockholders or shareholders are part-owner of the company.
TYPES OF STOCKS
Common Stocks
Usually purchased for participation in the profits and control of ownership and
management of the company.
Holders have voting rights.
Preferred Stocks
Name derived from preference given to the holders of these stocks over holders
of common stocks.
Holders are entitled to receive dividends before any dividends are paid to the
holders of common stocks.
Usually have a specified limited rate of return or dividend.
Investing Procedures
Choose a stockbroker.
Open an account with the stockbroker.
A trader or agent will be assigned to assist in either buying or selling any listed security.
Discuss with the trader what stocks to buy or sell.
Give the order to your broker/trader, and then get the acknowledgement receipt.
Securities fees and taxes on purchases and sales of stocks:
FEES/TAXES
a. Brokerage Commission
(maximum of 1.5% of
transaction cost + 12% VAT)
b. SCCP Fee of 0.0001 x
value of transaction
c. Transfer Fee of Php 100.00
+ 12% VAT
d. Cancellation Fee of
Php 20.00 + 12% VAT
e. Stock Transaction Tax
( of 1% value of transaction
in lieu of capital gains tax)
SELLER
BUYER
X
X
Illustration:
Buying Transaction:
Mr. X buys 5,000 shares of stock whose market price is P25.00. The amount that he needs is
about P125,000.00 plus charges. His required cash outflow will be as follows:
Market price/share
P 25.00
Number of shares
x 5,000
-----------------P125,000.00
Broker's Commission
(1.5% + 12% VAT)
+ 2,100.00
SCCP Fee
+
12.50
Transfer Fee + 12% VAT
+
112.00
Total Cash Outlay
P127,224.50
Selling Transaction:
Mr. Y sells 50,000 shares of stock whose market price is P5.00. The proceeds of the sale is about
P250,000.00 less charges. His cash inflow will be as follows:
Market price/share
P
5.00
Number of shares
x 50,000
P250,000.00
Brokers Commission (1.5% + 12% VAT)
SCCP Fee
Stock Transaction Tax
Cancellation Fee + 12% VAT
Net Cash Receivable
- 4,200.00
25.00
- 1,250.00
22.40
P244,502.60
Exercises
Buying Stocks:
Compute for the total Cash-out assuming you buy:
a. 10,000 shares at P20.00 price per share
b. 5,000 shares at P100.00 price per share
Selling Stocks:
Compute for the total cash inflow assuming you sell:
a. 100,000 shares at P10.00 price per share.
b. 10,000 shares at P5.00 price per share.
Answers:
Buying:
203,492.00
508.562.00
Selling:
978,077.60
48,882.60