which of the following scenarios illustrates a capital gain? warren was paid an extra 15 shares in the…

which of the following scenarios illustrates a capital gain? warren was paid an extra 15 shares in the company stock at the end of the second quarter based on the earnings the company posted. warren was paid $.25 a share in cash at the end of the first quarter from the earnings the company posted. warren bought 100 shares of stock for $10 per share. he sold the stock 3 months later for $12 per share. warren bought 100 shares of stock for $10 per share. he sold the stock 3 months later for $8 per share.

which of the following scenarios illustrates a capital gain? warren was paid an extra 15 shares in the company stock at the end of the second quarter based on the earnings the company posted. warren was paid $.25 a share in cash at the end of the first quarter from the earnings the company posted. warren bought 100 shares of stock for $10 per share. he sold the stock 3 months later for $12 per share. warren bought 100 shares of stock for $10 per share. he sold the stock 3 months later for $8 per share.

Answer

Brief Explanations:

A capital gain occurs when an asset is sold for a higher price than its purchase - price. In the first two options, Warren receives additional shares or cash based on company earnings, which are dividends or stock - based rewards, not capital gains. In the third option, Warren buys stock at $10 per share and sells at $12 per share, making a profit from the price difference, which is a capital gain. In the fourth option, he sells at a lower price, resulting in a capital loss.

Answer:

Warren bought 100 shares of stock for $10 per share. He sold the stock 3 months later for $12 per share.