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An investor buys 200 shares of stock selling at $95 per share using a margin of 68 %. The stock pays annual dividends of $2.00
An investor buys 200 shares of stock selling at $95 per share using a margin of 68 %. The stock pays annual dividends of $2.00
per share. A margin loan can be obtained at an annual interest cost of 6.7%. Determine what return on invested capital the investor will realize if the price of the stock increases to
$102 within six months. What is the annualized rate of return on this transaction?
If the price of the stock increases to $102 within six months, the six-month return on this transaction is %. (Round to two decimal places.)
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