Question
An investor buys 100 shares of stock selling at $67 per share using a margin of 72%. The stock pays annual dividends of $3.00 per
An investor buys 100 shares of stock selling at $67 per share using a margin of 72%. The stock pays annual dividends of $3.00 per share. A margin loan can be obtained at an annual interest cost of 5.7%. Determine what return on invested capital the investor will realize if the price of the stock increases to $84 within six months. What is the annualized rate of return on this transaction?
If the price of the stock increases to $84 within six months, the six-month return on this transaction is (enter your response here%.) (Round to two decimal places.)
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