Question

After buying 200 shares of common stock in Epic Electronics for $20 per share, Rashad later sold the same shares for $25 per share. Rashad's capital gain on the total transaction is_______________.

Answer 1

Answer:

$1,000

Explanation:

Given that,

Number of shares purchased = 200 shares

Purchased cost per share = $20

Selling price for the same number shares = $25

Capital gain on the total transaction:

= Sales revenue - Total cost

= (Number of shares sold × Selling price per share) - (Number of shares purchased × Cost per share)

= (200 shares × $25) - (200 shares × $20)

= $5,000 - $4,000

= $1,000

Therefore, the capital gain of the Rashad on the total transaction is $1,000.