Question
An investor buys 200 shares of stock selling at $89 per share using a margin of 59%. The stock pays annual dividends of $ 2.00
An investor buys 200 shares of stock selling at $89 per share using a margin of 59%. The stock pays annual dividends of $ 2.00 per share. A margin loan can be obtained at an annual interest cost of 9.6%. Determine what return on invested capital the investor will realize if the price of the stock increases to $111 within six months. What is the annualized rate of return on this transaction?
If the price of the stock increases to $111 within six months, the six-month return on this transaction is__%
The annualized rate of return on this transaction is ___%
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