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An investor buys 300 shares of stock selling at $64 per share using a margin of 58%. The stock pays annual dividends of $2.00 per
An investor buys 300 shares of stock selling at $64 per share using a margin of 58%. The stock pays annual dividends of $2.00 per share. A margin loan can be obtained at an annual interest cost of 5.2%. Determine what return on invested capital the investor will realize is the price of stock increases to $89 within six months. What is tha annualized rate of return on this transaction?
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