Eric owns stock in 3 corporations: James, Inc.; Wade, Inc.; and Bosh, Inc. He ac
ID: 2381038 • Letter: E
Question
Eric owns stock in 3 corporations: James, Inc.; Wade, Inc.; and Bosh, Inc. He acquired each of these stocks on January 1, 2008. On June 30, 2010, Eric is trying to determine how much appreciation he has received from each of his stocks. He wishes to sell the worst performing stock. The performance on each stock is as follows:James, Inc: 250 shares were purchased for $476.85. At the end of each quarter to date, James, Inc. paid a dividend of $0.27 per share. The share price of James, Inc. on June 30, 2010 is $3.16 per share.
Wade, Inc: 100 shares were purchased for $576.15. This stock has never paid a dividend. The share price of Wade, Inc. on June 30, 2010 is $8.98 per share.
Bosh, Inc: 150 shares were purchased for $455.89. The stock split 2 for 1 on January 1, 2009. It has never paid a dividend. The share price of Bosh, Inc. on June 30, 2010 is $3.25 per share.
How much income/appreciation has Eric earned on each of these stocks?
Explanation / Answer
James Inc.
250 stocks --> $476.85
$1.9074 per share
$0.27 per share = $67.50 paid to Eric
Stock now worth $3.16 per share
Stock that Eric owns = $790
Change in stock = $1.2526 per share ($313.15)
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Wade Inc.
100 stocks --> $576.15
$5.7615 per share
No dividend paid --> Eric gets $0.00
Stock now worth $8.98 per share
Stock that Eric owns = $898
Change in stock = $3.2185 per share ($321.85)
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Bosh Inc.
150 stocks --> $455.89
$3.0393 per share
Stock split 2 to 1
Eric now owns 300 stock, so
300 stocks --> $455.89
$1.5196 per share
No dividend paid --> Eric gets $0.00
Stock now worth $3.25 per share
Stock that Eric owns = $487.50
Change in stock = $1.7304 per share ($259.56)
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