Miguel paid a total of $12,000 for stock that was $8 per share. If he sold all his shares for $15,000, how much did he make per share?
A. $2
B. $8
C. $10
D. $12
Answer (2)
Calculate the number of shares Miguel bought: 8 12000 = 1500 .
Calculate the total profit Miguel made: 15000 − 12000 = 3000 .
Calculate the profit per share: 1500 3000 = 2 .
Miguel made a profit of $2 per share.
Explanation
Problem Analysis Miguel initially invested in stocks. We need to determine how much profit he made per share after selling them.
Calculating the Number of Shares First, we calculate the number of shares Miguel bought. He spent $12,000 and each share cost $8. The number of shares is calculated as: Number of shares = Price per share Total cost = 8 12000 = 1500 So, Miguel bought 1500 shares.
Calculating the Total Profit Next, we determine the total profit Miguel made. He sold the shares for $15,000 and initially bought them for $12,000. The total profit is calculated as: Total Profit = Selling price − Total cost = 15000 − 12000 = 3000 So, Miguel made a total profit of $3000.
Calculating the Profit Per Share Now, we calculate the profit per share. We divide the total profit by the number of shares: Profit per share = Number of shares Total profit = 1500 3000 = 2 Therefore, Miguel made a profit of $2 per share.
Final Answer The profit Miguel made per share is $2.
Examples
Understanding profit per share is crucial in stock trading. For instance, if you invest in a company and want to evaluate your return, calculating profit per share helps you assess the investment's success. Suppose you bought 500 shares of a company at $10 per share, totaling $5000. If you sell them later for $12 per share, you receive $6000. Your profit is $6000 - $5000 = $1000, and your profit per share is $1000 / 500 = $2. This metric helps compare different investment opportunities and understand the profitability of each share.
Miguel made a profit of $2 per share after selling his stock. He bought 1500 shares with his $12,000 investment and sold them for a total of $15,000, resulting in a total profit of $3000. Therefore, the correct answer is A. $2.
;
