You purchase 500shares of a start-up for $1.34/share. Over the next 10 years, the stock splits twice. First, there is a 2:1 split followed by a 3:2 split.At the end of the 10 years, the stock is worth $3.15/share. Calculate the CAGR.
Figure out the splits first. A 2:1 split gives him 2 * 500 = 1000 shares. Now you get a 3:2 split (3/2) * 1000 = 3000/2 = 1500 shares.
At the end of ten years he has 1500 shares worth 3.15 / share Amount = 1500 * 3.15 = 4725 dollars.
His outlay was 500 * 1.34 = 670 dollars. I don't know what CAGR stands for so I don't know how to answer the question Profit if he sells it = 4725 - 670 = 4055
In summary Number of shares = 1500 cost of 500 shares = 670 Value of 1500 shares = 4725 Profit over Cost = 4055
You will have go through the summary to figure out what you want.
