At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.
When she turned 18, Kayla purchased 110 shares of Stock A for $38 per share; 88 shares of Stock B for $109 per share; 78 shares of Stock C for $57 per share; and 18 shares of Stock D for $98 per share. At age 36, Kayla sold Stock A for $5,019, Stock B for $11,490, Stock C for $6,131, and Stock D for $1,219 with annual dividends of $45 per year. Which stock provided Kayla with the greatest return on her investment? Stock A Stock B Stock C Stock D
Let's look at them one by one. Stock A was bought for $38/share (110 shares) and sold for $5019. How much did stock A cost to purchase?
38 * 110 - 4,180. So $4,180 to purchase Stock A?
Yes, that's correct. If it cost $4,180 to purchase, and Kayla received $5,019 when selling, how much was the return on the investment in stock A?
I believe you are correct :-) How about stock B? 88 shares @ $109, sold for $11,490
Stock B: 88 * 109 = $592 Stock C: 78 * 57 = 4,446 Stock D: 18 * 98 = 1,764
For the costs
So if she sold Stock B for $11,490 - $9,592 = $ 1,898
Stock C: $6,131 - 4,446 = $1,685
@whpalmer4 I'm not sure how to calculate Stock D because it has annual dividends of $45 per year
$1,219 - 1,764 = -545 which makes her in the negatives so she sold it for less than she invested but she also get the $45 annual dividends per year
okay, so, she got $45 annually in dividends. How many years?
It doesn't say but it did mention earlier that she is 36 when she sells but she had bought at age 18. So should I use that?
I don't think it would justify the cost though because 18*45 would only make her $810
I think she makes the most off of Stock B
Sorry, wrote numbers down in wrong order! basis on stock D was 18*98 = 1764 pocketed 810 in dividends sold for 1219 net: 1219+810-1764 = 265 Yes, B looks like the best investment. Easy to pick the good investments afterwards, it's before that is tricky :-)
@whpalmer4 thank you so much for all of your help and for helping me to understand it! Thank you! Fanned and medal!