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Student

Date

Period

12-5

Calculating the Profit or Loss from a Stock Sale

Selling your stock can result in either a profit or a loss. If the amount you receive on the sale minus the sales commission is greater than the total amount you paid for the stock, then you make a profit. If it is less than the total amount you paid for the stock, then you suffer a loss.

Net Sale Amount of Sale Commission Profit Net Sale Total Paid Loss Total Paid Net Sale

Example

Find the profit or loss.

Morgana LeFey paid a total of $8,600 for 50 shares of stock. She sold the stock for $170 per share and paid her broker a sales commission of $15. What is the profit or loss from the sale?

  • 1.

    Find the net sale. ($170 50) $15 $8,485 net sale

  • 2.

    Is the net sale greater than or less than the amount paid? $8,485 is less than $8,600

  • 3.

    Find the net loss. $8,600 $8,485 $115 loss

Practice

Find the net sale and the profit or loss.

Total Paid

Selling Price per Share

Number of Shares

1. 2. 3.

$ 2,850 13,125 5,365

$ 60.00 172.00 33.50

50 75 145

a.

b.

a.

b.

a.

b.

Commissio

n

Net

Profit or

Sale

Loss

$60.00 $75.00 $0.15 per sh

are

  • 4.

    Al Holman purchased 75 shares of stock and paid a total of $2,625. He sold the stock at a price of $36.82 per share and paid a $19 broker’s commission. What was the net amount of the sale? What was Holman’s profit or loss?

  • 5.

    Marybeth Evanston purchased 2,000 shares of stock at $3.15 per share. She recently sold the stock for $3.09 per share. Each transaction carried a broker’s fee of $9.95. What was Evanston’s net amount of the sale? What was her profit or loss?

  • 6.

    Standardized Test Practice Robert Masterson bought 150 shares of stock at $52 per share. He held the stock for 2 years and then sold it for $53.25 per share. His online brokerage fee is

$ 8 . 9 5 p l u s $ 0 . 1 0 p e r s h a r e . W h a t i s M a s t e r s o n s p r o fi t o r l o s s ?

A. $139.60 profit

B. $139.60 loss

C. $187.50 profit

D. $187.50 loss

84

Section 12-5

Study Guide

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

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