Joanne Blower owns 200 shares of Corel Corporation stock.She purchased the stock for $22 a share.She sold her stock for $28 a share.The commissions required to buy and sell her stock totaled $180.Assuming that she received no dividends during the time she owned the stock,what is her total profit from this transaction?

Question

Quizplus · Accepted Answer

To find Joanne's total profit, we need to first find her total cost and her total revenue.

Total Cost = Purchase Price x Number of Shares + Commissions to Buy
Total Cost = $22 x 200 + $90
Total Cost = $4,400 + $90
Total Cost = $4,490

Total Revenue = Selling Price x Number of Shares - Commissions to Sell
Total Revenue = $28 x 200 - $90
Total Revenue = $5,600 - $90
Total Revenue = $5,510

Profit = Total Revenue - Total Cost
Profit = $5,510 - $4,490
Profit = $1,020

However, we have to take into account the commissions required to buy and sell her stock, which totaled $180. Therefore, her actual profit is:

Actual Profit = Profit - Commissions
Actual Profit = $1,020 - $180
Actual Profit = $840

Therefore, Joanne's total profit from this transaction is $1,120.

Joanne Blower Owns 200 Shares of Corel Corporation Stock