An investor bought 100 shares of Copier Corp. for $65 a share. The firm paid an annual dividend of $2 a share. Commissions were $75 to purchase and $75 to sell. The price of the stock rose to $100 and the investor sold. What is the percentage earned on the investment?
How long did the investor keep the stock?
Ii don't know it didn't say. That's the full question!
It can't be answered because we don't know how many years the investor received the dividend.
Ok. Thank you!
To calculate the percentage earned on the investment, we need to determine the total cost of the investment and the total earnings.
First, let's calculate the total cost of the investment:
Number of shares bought: 100
Purchase price per share: $65
Commissions for purchase: $75
Total purchase cost = Number of shares bought * Purchase price per share + Commissions for purchase
= 100 * $65 + $75
= $6,500 + $75
= $6,575
Next, let's calculate the total earnings from the investment:
Annual dividend per share: $2
Number of shares: 100
Total dividend earnings = Annual dividend per share * Number of shares
= $2 * 100
= $200
The investor sold the shares for $100 each, giving a total earnings from the sale:
Selling price per share: $100
Number of shares: 100
Total sale earnings = Selling price per share * Number of shares
= $100 * 100
= $10,000
Now, let's calculate the total expenses incurred:
Commissions for sale: $75
Total expenses = Commissions for purchase + Commissions for sale
= $75 + $75
= $150
To calculate the net earnings, subtract the total expenses from the total earnings:
Net earnings = Total sale earnings - Total expenses
= $10,000 - $150
= $9,850
Finally, calculate the percentage earned on the investment:
Percentage earned = (Net earnings / Total cost of investment) * 100
= ($9,850 / $6,575) * 100
= 149.71%
Therefore, the investor earned approximately 149.71% on the investment.