Question
An investor buys $16,000 worth of a stock priced at $25 per share using a 60% initial margin. The broker charges 6% on the margin
An investor buys $16,000 worth of a stock priced at $25 per share using a 60% initial margin. The broker charges 6% on the margin loan and requires a 35% maintenance margin. The stock pays a $1.00 per share dividend in one year and then the stock is sold at $27 per share. What was the investor's rate of return?
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Fundamentals Of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 10th Edition
1337902578, 978-1337902571
