SECTION 12-3 Stocks.

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Presentation transcript:

SECTION 12-3 Stocks

Section Objective Solve for: total cost of a stock investment

Key Words to Know stocks Shares of ownership in a corporation stock certificate Proof of ownership in a corporation

Number of Shares × Cost per Share Formula: Cost of Stock = Number of Shares × Cost per Share

Cost of Stock + Commission Formula 2 Total Paid = Cost of Stock + Commission

Do Now 1 Melanie Lambert purchased 100 shares of stock at $106.30 per share. Her Internet online stockbroker charged her a $15.95 commission. What is the total amount that she paid for the stock?

Do Now Answer: Step 1 Find the cost of a stock. Number of Shares × Cost per Share 100 × $106.30 = $10,630

Answer: Step 2 Find the total paid. Cost of Stock + Commission $10,630 + $15.95 = $10,645.95

SECTION 12-4 Stock Dividends

Section Objective Compute: annual yield of a stock investment annual dividend of a stock investment

Key Words to Know dividend Money received for being a shareholder in a corporation.

Formula 1 How do I find the total annual dividend? Total Annual = Annual Dividend × Number Dividend per Share of Shares

Formula 2 Yield = Annual Dividend per Share Cost per Share How do I find the annual yield? Yield = Annual Dividend per Share Cost per Share

Do Now 1 Pam Schmidt bought 80 shares of Network Associates stock at $24 per share. The company paid annual dividends of $0.38 per share. What is the total annual dividend? What is the annual yield to the nearest hundredth of a percent?

Answer: Step 1 Find the total annual dividend. Annual Dividend per Share × Number of Shares $0.38 × 80 = $30.40

Answer: Step 2 Find the annual yield. Annual Dividend per Share ÷ Cost per Share $0.38 ÷ $24.00 = 0.0158 or 1.58%

Assignment: Workbook P.82 Complete & Hand in

Do Now 2 Susana Valasco owns 100 shares of Wagoneer Inc. stock. The stock ranged from a low of $37.26 to a high of $52.86 last year. The annual dividend is $1.10. What is the annual yield based on the high and the low? What is the total annual dividend?

Example 2 Answer: Step 1 Find the annual yield based on the high and the low. Annual Yield on high price $1.10 = 0.02080 or 2.08% $52.86

$1.10 = 0.02952 or 2.95% $37.26 Answer: Step 1 (cont.) Annual Yield on low price $1.10 = 0.02952 or 2.95% $37.26

Answer: Step 2 Find the total annual dividend. Annual Yield on high price 100 × $1.10 = $110.00 total annual dividend

SECTION 12-5 Selling Stocks

Section Objective Calculate: profit from a stock sale loss from a stock sale

Key Words to Know profit Money made on an investment over and above the amount spent on it. loss The amount of money lost on an investment, such as stocks.

Formula 1 How do I find the net sale of a stock? Net Sale = Amount of Sale – Commission

Formula 2 How do I calculate the profit on my stock? Profit = Net Sale – Total Paid

Formula 3 How do I calculate the loss on my stock? Loss = Total Paid – Net Sale

Example 1 Bill Tennyson paid a total of $3,738.43 for 75 shares of Watson Parcel Service. He sold the stock for $51.50 a share and paid a sales commission of $39.45. What is the profit or loss from the sale?

Amount of Sale – Commission ($51.50 × 75) – $39.45 Answer: Step 1 Find the net sale. Amount of Sale – Commission ($51.50 × 75) – $39.45 $3,862.50 – $39.45 = $3,823.05

Answer: Step 2 Is the net sale greater than the total paid? Yes, $3,823.05 is greater than $3,738.43.

Find the profit. Net Sale – Total Paid $3,823.05 – $3,738.43 = $84.62 Answer: Step 3 Find the profit. Net Sale – Total Paid $3,823.05 – $3,738.43 = $84.62

Assignment: Workbook p. 83 Hand in