Final answer:
The correct formula to calculate profit on each share is to subtract the total cost from the total selling price and then divide by the number of shares. This accounts for the average profit per share by considering selling prices, buying prices, and fees.
Step-by-step explanation:
The correct answer is option a) Total Selling Price−Total Cost divided by Number of Shares. To calculate the profit on each share, one must consider the total selling price of all shares subtracted by the total cost to obtain those shares, and then divide that result by the number of shares to find the profit per share. For example, if Randy bought 800 shares at $19.50 each and sold them at $34.50 each, the total profit would be calculated by subtracting the total costs from the total selling price, then dividing by the number of shares to find the average profit per share.
Profit per Share = (Selling Price per Share × Number of Shares) - (Buying Price per Share × Number of Shares + Transaction Fees) / Number of Shares
To calculate the profit on each share, you would use the formula:
(Total Selling Price - Total Cost) / Number of Shares
For example, if the total selling price is $100,000, the total cost is $50,000, and the number of shares is 500, the profit per share would be:
(100,000 - 50,000) / 500 = $100
So, the profit on each share in this case would be $100.