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1. If the price of the stock increases to $86 within six months, the six-month return on this transaction is %? 2. What is the
1. If the price of the stock increases to $86 within six months, the six-month return on this transaction is %?
2. What is the annualized rate of return on this transaction?
An investor buys 100 shares of stock selling at $53 per share using a margin of 56%. The stock pays annual dividends of $1.00 per share. A margin loan can be obtained at an annual interest cost of 5.8%. Determine what return on invested capital the investor will realize if the price of the stock increases to $86 within six months. What is the annualized rate of return on this transaction? C. If the price of the stock increases to $86 within six months, the six-month return on this transaction is %. (Round to two decimal places.)Step by Step Solution
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