Bill Campbell invested $3,200 and borrowed $3,200 to purchase shares in Kellogg. At the time of his investment, Kellogg stock was selling for $52 a share (a) If Bill paid a $53 commission, how many shares could he buy if he used his $3,200 and borrowed $3,200 on margin to buy Kellogg stock? (Round your answer to 2 decimal places.) Number of shares (b) Assuming Bill did use margin, paid a $92 total commission to sell his Kellogg stock, and sold his stock for $57 a share, how much profit did he make on his Kellogg investment? (Use the number of shares computed in part (a) rounded to 2 decimal places. Round your final answer to 2 decimal places.) Total profit after commissions

Bill Campbell

a) The number of shares that Bill could buy = 122.06 shares.

b) The total profit after commissions = $465.42

Explanation:

a) Data and Calculations:

Investment from own funds = $3,200

Investment on margin = $3,200

Total investment = $6,400

a) If Bill paid a $53 commission, the number of shares that he could buy if he used his $3,200 and borrowed $3,200 on margin to buy Kellogg stock, with Kellogg's stock selling for $52 a share is:

Total investment =       $6,400

Less commission                53

Investment on shares $6,347

Number of shares = 122.06 ($6,347/$52)

b) Sale of stock:

Sales value = $57 * 122.06 = $6,957.42

Total commission =                       92.00

Net value from sale =            $6,865.42

Cost of investment =             $6,400.00

Profit on investment =              $465.42

mcdonald's fast-food restaurants have a well-designed training program for all new employees. each new employee is supposed to learn how to perform standardized tasks required to maintain mcdonald's service quality. due to labor shortages in some areas, new employees begin work as soon as they are hired and do not receive any off-the-job training. this nonconformity to standards creates control loss.