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
Formula:
Cost of Stock =
Number of Shares × Cost per
Share
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
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%
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
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
 loss
from a stock sale
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?
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.
Answer: Step 3
Find the profit.
Net Sale – Total Paid
$3,823.05 – $3,738.43 = $84.62