1. SECTION
12-3
Stocks

2. Section Objective
Solve for:
total cost of a stock investment

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

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

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

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

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

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

9. SECTION
12-4
Stock Dividends

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

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

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

13. 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

14. 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?

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

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

17. Assignment:
Workbook P.82
Complete & Hand in

18. 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?

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

20. $1.10 = 0.02952 or 2.95% $37.26 Answer: Step 1 (cont.)
Annual Yield on low price
$ = or 2.95%
$37.26

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

23. SECTION
12-5
Selling Stocks

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

25. 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.

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

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

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

29. Example 1
Bill Tennyson paid a total of $3, 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?

30. 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, – $39.45 = $3,823.05

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

32. 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, – $3, = $84.62

33. Assignment:
Workbook p. 83
Hand in