Jo owns 150 shares of Delta General stock. She purchased the stock for $24 a share. She sold the stock for $30 per share. The commissions required to buy and sell her stock cost her $120. Assuming that she received no dividends (income) during the time she owned the stock, what is her total return (not rate of return) for this transaction?
To calculate Jo's total return for this transaction, we need to consider the initial investment, the selling price, and any commissions paid.
1. First, let's calculate the initial investment by multiplying the number of shares by the purchase price:
Initial investment = Number of shares * Purchase price
= 150 shares * $24 per share
= $3,600
2. Next, let's calculate the total amount received from selling the stock by multiplying the selling price by the number of shares:
Total amount received = Number of shares * Selling price
= 150 shares * $30 per share
= $4,500
3. Now, let's subtract the commissions paid from the total amount received:
Total amount received after commissions = Total amount received - Commissions
= $4,500 - $120
= $4,380
4. Finally, let's calculate the total return by subtracting the initial investment from the total amount received after commissions:
Total return = Total amount received after commissions - Initial investment
= $4,380 - $3,600
= $780
Therefore, Jo's total return for this transaction is $780.
(6 * 150) - 120 = 780
780 / (150 * 24) = 0.21666 = 22%