Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

8 months ago you bought 1 5 5 of ABC company at a price of $ 1 4 . 3 2 per share. To finance

8 months ago you bought 155 of ABC company at a price of $14.32 per share. To finance this, you borrowed 787$ from a broker at an EAR of 5.8%. Today, you just sold all the stock at a price of $19.98 each and fully repaid your loan including the interest owing. Knowing this, what is your ANNUALIZED rate of return on equity (ROE)?
[Hint: Recall that equity at any time is equal to the assets at that time less any liabilities at that same time]
Note: Please give your answer in percent so that you write "5" to represent 5%(not 0.05)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Banking And Finance Managing The Moral Dimension

Authors: James Lynch

1st Edition

1855731762, 978-1855731769

More Books

Students also viewed these Finance questions

Question

8. Have you addressed credibility issues?

Answered: 1 week ago