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?

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Business

Lilia

10 May, 22:35

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?

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Answers (1)

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Madalynn Oconnor · Answer 1

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

Explanation:

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

= (80 - 50 - 2) * 100

= $ 2800