Question

Wiley sold short 100 shares of ACME stock at a price of $80 per share. While the position was open, a dividend of $2 per share was distributed. Wiley covered the short position at $50 per share. What is his total gain, ignoring commissions and borrowing costs?

Answer 1

His total gain, ignoring commissions and borrowing costs is $2800

Step-by-step explanation:

Gain = (Sales price - purchase price - Dividend ) * No of shares

= ( 80 - 50 - 2) * 100

= $ 2800