If you're seeing this message, it means we're having trouble loading external resources on our website.

If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked.

Main content
Current time:0:00Total duration:4:08

Video transcript

shares of stock represent how much of a company a person owns puffs incorporated is owned by Peter Paul and Mary Peter owns 4050 shares Paul owns two thousand five hundred ten shares and Mary owns 40 200 or four thousand two hundred shares suppose the company made a profit this year of 1 million five hundred thousand dollars if each shareholder gets a proportion of the total profit that is equal to the proportion of the share they own how much money does Mary receive so first let's think about what fraction or what percentage or what proportion of the total profit should Mary receive so Mary owns Mary owns four thousand to two hundred shares so four thousand two hundred and how many total shares are there in the company well the total the only owners of this company are Peter Paul and Mary so the total number of shares are the sum of Peter Paul and Mary shares so we know we know that Peter owns four thousand and fifty shares 4050 we know that Paul owns two thousand five hundred ten two thousand five hundred ten and of course we know that Mary Owens 4,200 4,200 so let's figure this is the fraction of this this is the fraction of the profit that Mary should be getting so let's figure out this with a calculator so this is going to be it's going to be four thousand two hundred divided by divided by four thousand fifty plus two thousand five hundred and ten plus four thousand two hundred and so Mary should get 0.39 of the profit or if we talk about in terms of percentage it would be thirty nine percent of the profit so this right over here is 0.3 nine Oh actually let me just leave it like that so it's going to be so this is the is approximately equal to this is approximately equal to 0.39 and so if we want to figure out how much profit she gets she gets this much times the total profit so Mary gets Mary gets so she gets 0.39 and this is the exact quantity right over here 0.39 is the approximation so approximately 0.3 this little squiggly equal sign is how I say approximately she's going to get zero point three nine times the total profit which is 1 million five hundred 1 million five hundred thousand dollars and so let's go back to our calculator and so this is we said approximately zero point three nine this is the exact value I can get that exact value again at least in this calculator by saying second answer this literally means the previous answer so this is literally this number right over here point three nine zero three three four whatever this is so this exact quantity times $1,500,000 one two three there we go this $1,500,000 got to make sure I have the right number of zeros there and that gets us 585 thousand dollars five hundred won and we need to round to the nearest penny and 86 cents so let me put that someplace where I can see it so let me so this is going to be equal to this is equal to five hundred and eighty five thousand dollars five hundred and one and if we round 86 cents so not bad for one year for Mary she should be able to live quite well just on her just on her dividends from puffs incorporated