After buying 100 shares of common stock in the It's All Good Corporation for $20 per share, Popeye later sold the same shares for $25 per share. Popeye's capital gain on the total transaction is:

Question

Quizplus · Accepted Answer

The formula for capital gain is: 
Capital gain = (selling price per share - purchase price per share) x number of shares

In this question, the selling price per share is $25, the purchase price per share is $20, and the number of shares is 100.

Capital gain = ($25 - $20) x 100 = $500

Therefore, Popeye's capital gain on the total transaction is $500, which is option C.

After Buying 100 Shares of Common Stock in the It's