Question

In April, Sandi sold 1,600 shares of Federal Express at $105.00 per share. In May, the stock reached a low during the Great Recession and was selling for $32.00 per share. Sandi used the proceeds from the sale and repurchased Federal Express at $32.00 per share in May. What is the value of Sandi's stock holdings in Federal Express if the shares are selling for $91.00 today?

Answer 1

$477,750

Step-by-step explanation:

For computing the value of the stock, first, we have to determine the purchase share which is shown below:

= (Number of shares sold × price per share) ÷ (repurchase share price)

= (1,600 shares × $105) ÷ ($32)

= 5,250 shares

Now the today selling price is $91

So, the value of the stock would be

= Repurchase shares × today selling price

= 5,250 shares × $91

= $477,750