Question

you purchase 723 shares of Nike at $47.75 per share and one year later you are ready to sell your 723 shares for the current market price of $62.25. did you earn a profit or lose money from this stock sale? how much money did you make or lose? explain how you calculated your answer

Answer 1

Can you calculate how much you had to spend to buy 723 shares at $47.75 per share?

Answer 2

do i do 723 x 47.75 and 62.25 x 723 then minus to get the answer?

Answer 3

Yes, that's exactly right. for the other parts of the question, think if you paid more than you made on the sale, is that a profit or loss?

Answer 4

loss, so you lost $100? im so confused lol

Answer 5

I didn't get "$100"... hmm.. I got Paid 723 x 47.75 = $34,523.25 and Received 723 x 62.25 = $45,006.75.

Answer 6

Since you sold it for $14.50 per share MORE than you paid for it, your common sense would say "good deal!!", so you expect to have made a profit, not a loss. When you subtract, subtract the total received from the sale ($45006.75) minus the cost ($34,523.25) to get $10,483.5

Answer 7

But if you make a mistake and subtract the other way around, it's no big deal, you just get the negative of that, or -$10,483.50, so you would realize that you SHOULD have received a profit, since you sold it for more than you paid for it, so just re-do the subtraction the other way around. Be sure to think about whether the answer actually makes sense... if not, you probably mixed it up.

Answer 8

If you are still confused, think easier numbers: Buy 2 shares for $3 each (cost $6), sell 2 shares for $4 each (receive $8), Profit = $8-$6 = $2. But if you paid $8 and only received $6, then $6 - $8 = -$2 meaning you had a $2 loss, not a profit.

Answer 9

okay so i would write 723 x 62.25 = 45 006.75 - 723 x 47.75 = 34 523.25 to show the work?

Answer 10

I think so, yes. And explain briefly that if you sell for more than you paid, you made a profit -- that's what happened here.

Answer 11

thank you, can you help me with this one too?

during the year you own nike stock you earn a dividend of $1.25 per share. you own 720 shares. how much did you earn in dividends? how did you arrive at your answer?

Answer 12

Sure :)
Care to make a quick try at it first? Your instinct was right on the first one...

Answer 13

Yes, good :) They use all the extra words like stocks, dividends, shares, etc. to cause you stress. But all these are the same idea... a certain amount of something, like number of shares = 720, and a certain amount PER the first thing, like dividend per share. Then you can find the total by multiplying.

Answer 14

If they gave you the TOTAL dividend earned and the number of shares and then asked how much dividend PER SHARE, then you would divide instead. Like $900 total dividend on 720 shares = (900 / 700) = 1.25 per share.