Calculate the total cost of the shares

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Reference no: EM131074731

An investor bought 15,000 Ordinary Shares (nominal value £4.50) at 480 pence each. She paid a broker's commission of 0.25% of the nominal value.

(a) Calculate the total cost of the shares including commission. Give your answer in pounds.

After 5 years, the shares are sold for 912 pence.

(b) Calculate the income from the sale, before commission.

For the sale, the investor pays a flat-rate broker's commission of £80. No dividend was paid for the first two years. For the next two years, the dividends declared were:

Year 3 Year 4

3p per share 6.5p per share

For the fifth year the dividend amounted to 2% of the nominal value of the shares.

(c) Calculate the total profit made by the investor, including purchase, sale, dividends and commissions.

Reference no: EM131074731

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