Sarah and James Hernandez purchased 300 shares of Cisco Systems stock at $18.15
ID: 2751845 • Letter: S
Question
Sarah and James Hernandez purchased 300 shares of Cisco Systems stock at $18.15 a share. One year later, they sold the stock for $23.10 a share. They paid a broker a $36 commission when they purchased the stock and a $50 commission when they sold the stock. During the 12-month period the couple owned the stock, Cisco Systems paid no dividends. Calculate the Hernandez's total return for this investment. Round your answer to the nearest whole number. Do not include the comma, period, and "$" sign in your response.
Explanation / Answer
PURCHASE PRICE OF THE 300 SHARES (300 * 18.15) =5445
ADD COMMISSION PAID =36
TOTAL INVESTMENT =5481
SELLING PRICE OF 300 SHARES(300*23.10) =6930
LESS COMMISSION PAID =(50)
TOTAL COLLECTION AMOUNT FROM SALES =6880
TOTAL RETURN FROM THE SALES (6880 - 5481) =1399
RETURN ON INVESTMENT = TOTAL RETURN FROM SALES / TOTAL INVESTMENT *100
= 1399/5481*100
=25.52% OR 26%
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