An investor bought 7,800 Ordinary Shares (nominal value £0.50) at £3.15 each.
(a) Calculate the cost of the shares.
Broker's commission on purchase was 0.5% of the nominal value of the shares.
(b) Calculate the broker's commission and the total cost of the shares, including commission.
At the end of 3 years, the shares were sold for £4.10 per share. The broker's rate of commission on sale was 0.85%, and was calculated on the nominal value.
(c) Calculate the proceeds from the sale, net of commission.
The dividends declared on the nominal value of the ordinary shares were
Year 1 Year 2 Year 3
11% 10.5% 4%
(d) Calculate the total dividends received by the investor.
(e) Compare the total paid on purchase with the total received (net) from dividends and sale.