Question

Need help urgently; it's financial math! Will fan and medal anyone who can help!

Answer 1

When she turned 18, Kayla purchased 110 shares of Stock A for $38 per share; 88 shares of Stock B for $109 per share; 78 shares of Stock C for $57 per share; and 18 shares of Stock D for $98 per share. At age 36, Kayla sold Stock A for $5,019, Stock B for $11,490, Stock C for $6,131, and Stock D for $1,219 with annual dividends of $45 per year. Which stock provided Kayla with the greatest return on her investment?

Stock A
Stock B
Stock C
Stock D

Answer 2

Let's look at them one by one.

Stock A was bought for $38/share (110 shares) and sold for $5019. How much did stock A cost to purchase?

Answer 3

38 * 110 - 4,180. So $4,180 to purchase Stock A?

Answer 4

Yes, that's correct. If it cost $4,180 to purchase, and Kayla received $5,019 when selling, how much was the return on the investment in stock A?

Answer 5

$839

Answer 6

I believe you are correct :-)

How about stock B? 88 shares @ $109, sold for $11,490

Answer 7

Stock B: 88 * 109 = $592

Stock C: 78 * 57 = 4,446

Stock D: 18 * 98 = 1,764

Answer 8

For the costs

Answer 9

So if she sold Stock B for $11,490 - $9,592 = $ 1,898

Answer 10

Stock C: $6,131 - 4,446 = $1,685

Answer 11

@whpalmer4 I'm not sure how to calculate Stock D because it has annual dividends of $45 per year

Answer 12

$1,219 - 1,764 = -545 which makes her in the negatives so she sold it for less than she invested but she also get the $45 annual dividends per year

Answer 13

okay, so, she got $45 annually in dividends. How many years?

Answer 14

It doesn't say but it did mention earlier that she is 36 when she sells but she had bought at age 18. So should I use that?

Answer 15

I don't think it would justify the cost though because 18*45 would only make her $810

Answer 16

I think she makes the most off of Stock B

Answer 17

Sorry, wrote numbers down in wrong order!

basis on stock D was 18*98 = 1764
pocketed 810 in dividends
sold for 1219

net: 1219+810-1764 = 265

Yes, B looks like the best investment. Easy to pick the good investments afterwards, it's before that is tricky :-)

Answer 18

@whpalmer4 thank you so much for all of your help and for helping me to understand it! Thank you! Fanned and medal!