Jack bought 120 shares of ABC Banking for $12.27 each. He sold the shares 90 days later for 21.48% more than he paid. When he held the shares, ABC Bank paid a dividend of $0.55 per share. Brokerage fees are $25 or 0.5% of transaction amount, whichever is higher.
How much profit did Jack make with this investment?
Original Investment
Share Investment = 120 x $12.27 = $1,472.40
Brokerage Fees = $1,472.40 x 0.005 = $7.36. Since this was less than $25.00, the $25.00 fee was charged.
Total Investment = $1,472.40 + $25.00 = $1,497.40
Proceeds of Sale
Share price at sale = $12.27 x 1.2148 = $14.91
Total Sale Proceeds = $14.91 x 120 = $1,789.20
Brokerage Fees = $1,789.20 x 0.005 = $8.95. Since this was less than $25.00, the $25.00 fee was charged.
Total Proceeds of Sales = $1,789.20 - $25.00 = $1,764.20
Gain on Sales = $1,764.20 - $1,497.40 = $266.80
Dividends Paid = 120 x $0.55 = $66.00
Total Profit = $266.80 + $66.00 = $332.80
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