Explanation Given information: Butch Gold purchased 500 shares of Shoreline Value fund for an offer price of $ 8.90 per share . Later the shares were sold at a net asset value of $10 .50 per share . For the time shares were hold, the fund paid a dividend of $0 .75 per share three times. Formula used: Formula to calculate total cost of purchase., Total cost of purchase = Number of shares × offer price of one share Formula to calculate proceeds from sale., Proceeds from sale = Number of share × net asset value of one share Formula to calculate total gain on sale., Total gain = Gain on sale + Dividends Formula to calculate return on investment., Return on investment = Total gain ( or loss ) Total cost of purchase Calculation: Consider the information provided. Shares 500 Offer Price $ 8.90 Net Asset Value $ 10.50 Per Share Dividends $ 0.75 per share three times Therefore, total cost can be calculated as: Total cost = Number of shares × offer price of one share = 500 × 8.90 = $ 4 , 450 Proceeds from sale can be calculate as: Proceeds from sale = Number of share × net asset value of one share = 500 × 10

Contemporary Mathematics For Business & Consumers, Loose-leaf Version

8th Edition

ISBN: 9781305867185

Author: Robert Brechner, Geroge Bergeman

Publisher: South-Western College Pub

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Chapter 20.III, Problem 29RE

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To calculate: The return on investment if Butch Gold purchased 500 shares of Shoreline Value fund for an offer price of $8.90 per share.

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Chapter 20.III, Problem 28RE

Chapter 20.III, Problem 30RE

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Chapter 20 Solutions

Contemporary Mathematics For Business & Consumers, Loose-leaf Version

Ch. 20.I - Techron Industries, Inc., has 1,400,000 shares of...Ch. 20.I - Prob. 2TIE Ch. 20.I - Prob. 3TIE Ch. 20.I - Prob. 4TIE Ch. 20.I - Bentley Systems. Inc., paid a dividend of $0.68...Ch. 20.I - Prob. 6TIE Ch. 20.I - You purchase 225 shares of Gulfstream Industries...Ch. 20.I - Prob. 1RE Ch. 20.I - Prob. 2RE Ch. 20.I - Prob. 3RE

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The return on investment if Butch Gold purchased 500 shares of Shoreline Value fund for an offer price of $ 8.90 per share .

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To calculate: The return on investment if Butch Gold purchased 500 shares of Shoreline Value fund for an offer price of $8.90 per share.

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Chapter 20 Solutions