Sarah and James Hernandez purchased 100 shares of
Cisco Systems stock at $18.50 a share.
One year later, they sold the stock for $26.35 a share. They paid a broker $32 commission when they
purchased the stock and a $40 commission when they sold the stock. During the twelve month period they owned the
stock, Cisco Systems paid no dividends.
Calculate the Hernandezs total return for this investment. (Obj. 1)
return for this investment is $713.
Price = $18.50 100 shares + $32
commission = $1,882
Price = $26.35100 shares $40
commission = $2,595
gain = $2,595 $1,882 = $713
Return = $0 Current Return + $713 capital gain = $713. (pp.394-395)