Answer :
To determine the gain or loss when selling the shares of Zycodec at the current closing price, we need to follow these detailed steps:
1. Determine the purchase price per share and the number of shares:
- The lowest price per share last year for Zycodec was \[tex]$29.39. - The stockholder purchased 25 shares at that price. 2. Calculate the total cost of purchasing the shares: \[ \text{Total cost} = \text{Lowest price per share} \times \text{Number of shares} \] Substituting the values, we get: \[ \text{Total cost} = 29.39 \times 25 = 734.75 \] 3. Determine the current closing price per share: - The closing price per share for Zycodec is \$[/tex]34.95.
4. Calculate the total value of the shares at the current closing price:
[tex]\[ \text{Total value} = \text{Closing price per share} \times \text{Number of shares} \][/tex]
Substituting the values, we get:
[tex]\[ \text{Total value} = 34.95 \times 25 = 873.75 \][/tex]
5. Determine the gain or loss:
[tex]\[ \text{Gain or loss} = \text{Total value} - \text{Total cost} \][/tex]
Substituting the values, we get:
[tex]\[ \text{Gain or loss} = 873.75 - 734.75 = 139.00 \][/tex]
Since the total value of the shares at the current closing price is higher than the total cost, the stockholder has realized a gain.
Therefore, the gain is \[tex]$139.00. The correct answer is: - The gain is \$[/tex]139.00
1. Determine the purchase price per share and the number of shares:
- The lowest price per share last year for Zycodec was \[tex]$29.39. - The stockholder purchased 25 shares at that price. 2. Calculate the total cost of purchasing the shares: \[ \text{Total cost} = \text{Lowest price per share} \times \text{Number of shares} \] Substituting the values, we get: \[ \text{Total cost} = 29.39 \times 25 = 734.75 \] 3. Determine the current closing price per share: - The closing price per share for Zycodec is \$[/tex]34.95.
4. Calculate the total value of the shares at the current closing price:
[tex]\[ \text{Total value} = \text{Closing price per share} \times \text{Number of shares} \][/tex]
Substituting the values, we get:
[tex]\[ \text{Total value} = 34.95 \times 25 = 873.75 \][/tex]
5. Determine the gain or loss:
[tex]\[ \text{Gain or loss} = \text{Total value} - \text{Total cost} \][/tex]
Substituting the values, we get:
[tex]\[ \text{Gain or loss} = 873.75 - 734.75 = 139.00 \][/tex]
Since the total value of the shares at the current closing price is higher than the total cost, the stockholder has realized a gain.
Therefore, the gain is \[tex]$139.00. The correct answer is: - The gain is \$[/tex]139.00