How to Calculate Cost of Stock

Learn how to calculate the cost of stocks or shares with the following examples:

Example 1:
A stock trader purchased 2,000 9% preferred stocks (nominal value $1) at $1.50 per share, and 1,000 common stocks (nominal value $1) at $5 per share. Calculate the total cost of stocks before commission.
Solution:
Cost of preferred stocks = 2,000 * $1.50 = $3,000
Cost of common stocks = 1,000 * $5 = $5,000
Total cost of stocks before commission = 3,000 + 5,000 = $8,000

Example 2:
An investor buy 500 shares of ABC stock at $6.00 per share. A broker charges a flat fee of $20.00 for any purchase plus, $0.03 per share. Calculate the total cost for 500 shares bought.
Solution:
Total cost of stocks = 500 * $6 + $20 + 500 * $0.03 = $3,035

* Next: Growth Rate in Earnings per Share
0 comments: