Question

Imagine that the stock price of a company called ROARJAGUAR (ticker: RJAG), initially a $ 40 stock, rises to $ 80.

a. What percent is the gain? This gain is called a two-bagger.

Answer 1

The percentage gain for the stock price of ROARJAGUAR (ticker: RJAG) rising from $40 to $80 is 100%. This doubling of price is also known as a 'two-bagger' because the stock price has doubled.

Step-by-step explanation:

To calculate the percentage gain when the stock price of a company rises from one value to another, we can use the formula for percentage change, which is (New Value - Old Value) / Old Value × 100%. For ROARJAGUAR (ticker: RJAG), the stock price increased from $40 to $80.

Using the formula:

Percentage Gain = (($80 - $40) / $40) × 100%

Percentage Gain = ($40 / $40) × 100%

Percentage Gain = 1 × 100%

Percentage Gain = 100%

Therefore, the gain is 100%, which is why this gain is referred to as a "two-bagger," implying that the stock price has doubled.