# Calculate the Hernandez’s total return for this investment 1 answer below »

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 Hernandez’s total return for this investment. (Obj. 1)

The total return for this investment is $713. Purchase Price =$18.50 100 shares + $32 commission =$1,882

Selling Price = $26.35100 shares -$40 commission = $2,595 Capital gain =$2,595 - $1,882 =$713

Total Return = $0 Current Return +$713 capital gain = \$713. (pp.394-395)

AMALA K

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