stocks 12-3 section. section objective solve for: total cost of a stock investment

Stocks12-3

SECTIONSECTION

Section ObjectiveSolve for:

total cost of a stock investment

stocks

Shares of ownership in a corporation

stock certificate

Proof of ownership in a corporation

Key Words to Know

Cost of Stock =

Number of Shares × Cost per Share

Formula:

Total Paid =

Cost of Stock + Commission

Formula 2

Melanie Lambert purchased 100 shares of stock at $106.30 per share. Her Internet online stockbroker charged her a $15.95 commission.

What is the total amount that she paid for the stock?

Do Now 1

Find the cost of a stock.

Number of Shares × Cost per Share

100 × $106.30 = $10,630

Do Now Answer: Step 1

Find the total paid.

Cost of Stock + Commission

$10,630 + $15.95 = $10,645.95

Answer: Step 2

Stock Dividends12-4SECTION

Section ObjectiveCompute:

annual yield of a stock investment

annual dividend of a stock investment

Key Words to Know

dividendMoney received for being a shareholder in a corporation.

How do I find the total annual dividend?

Total Annual = Annual Dividend × Number Dividend per Share of Shares

Formula 1

How do I find the annual yield?

Yield = Annual Dividend per Share Cost per Share

Formula 2

Pam Schmidt bought 80 shares of Network Associates stock at $24 per share. The company paid annual dividends of $0.38 per share.

What is the total annual dividend?

What is the annual yield to the nearest hundredth of a percent?

Do Now 1

Find the total annual dividend.

Annual Dividend per Share × Number of Shares

$0.38 × 80 = $30.40

Answer: Step 1

Find the annual yield.

Annual Dividend per Share ÷ Cost per Share

$0.38 ÷ $24.00 = 0.0158 or 1.58%

Answer: Step 2

Assignment:Workbook P.82

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Susana Valasco owns 100 shares of Wagoneer Inc. stock. The stock ranged from a low of $37.26 to a high of $52.86 last year. The annual dividend is $1.10. What is the annual yield based on the high and the low? What is the total annual dividend?

Do Now 2

Find the annual yield based on the high and the low.

Annual Yield on high price

$1.10 = 0.02080 or 2.08%$52.86

Example 2 Answer: Step 1

Annual Yield on low price

$1.10 = 0.02952 or 2.95%$37.26

Answer: Step 1 (cont.)

Find the total annual dividend.Annual Yield on high price100 × $1.10 = $110.00 total annual dividend

Answer: Step 2

Selling Stocks12-5SECTION

Section ObjectiveCalculate:

profit from a stock sale

loss from a stock sale

Key Words to Know

profit

Money made on an investment over and above the amount spent on it.

loss

The amount of money lost on an investment, such as stocks.

How do I find the net sale of a stock?

Net Sale = Amount of Sale – Commission

Formula 1

How do I calculate the profit on my stock?

Profit = Net Sale – Total Paid

Formula 2

How do I calculate the loss on my stock?

Loss = Total Paid – Net Sale

Formula 3

Bill Tennyson paid a total of $3,738.43 for 75 shares of Watson Parcel Service.

He sold the stock for $51.50 a share and paid a sales commission of $39.45.

What is the profit or loss from the sale?

Example 1

Find the net sale.

Amount of Sale – Commission

($51.50 × 75) – $39.45

$3,862.50 – $39.45 = $3,823.05

Answer: Step 1

Is the net sale greater than the total paid?

Yes, $3,823.05 is greater than $3,738.43.

Answer: Step 2

Find the profit.

Net Sale – Total Paid

$3,823.05 – $3,738.43 = $84.62

Answer: Step 3

Assignment:Workbook p. 83

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