Alex will recognize a gain of $4,200. Shares are created from a company's capital.
Each share serves as a unit of ownership in a company and is made available for sale in order to raise money for it.
Equity shares and preference shares are the two basic types into which shares can be separated. Equity shares allow their owners the ability to vote at annual general meetings and share in the company's profits. Such a stakeholder is responsible for both the company's losses and earnings.
In the given question,
Cost Price = $9,600
Selling Price = $13,800
Profit = Selling Price - Cost Price
= $13,800 -$9,600
= $4,200
Therefore, $4,200 is the required gain for Alex.
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