Question

Arnell Johnson bought 250 shares of Black Petroleum Company for $80 per share and paid a commission of $100. He sold the stock five years later for $124 per share and paid $215 commission. While he held the stock, it paid a dividend of $5.90 per share. What was Arnell's total dollar return on this stock?

Answer 1

Answer:

$12,160

Explanation:

As for the information provided,

Total amount received on sale = 250 $\times$ $124 = $31,000

Dividend received = $5.90 $\times$ 250 = $1,475

Less: Commission paid for such sale = $215

Therefore, amount received = $31,000 + $1,475 - $215 = $32,260

Amount used in purchasing such stock = 250 $\times$ $80 = $20,000

Also the commission was paid = $100

Total amount paid for acquisition = $20,100

Therefore, net return in dollars = $32,260 - $20,100 = $12,160