Question
An investor buys 300 shares of stock selling at $66 per share using a margin of 59%. The stock pays annual dividends of $ 1.00
An investor buys 300 shares of stock selling at $66 per share using a margin of 59%. The stock pays annual dividends of $ 1.00 per share. A margin loan can be obtained at an annual interest cost of 4.6%. Determine what return on invested capital the investor will realize if the price of the stock increases to $92 within six months. What is the annualized rate of return on this transaction?
A) If the price of the stock increases to $92 within six months, the six-month return on this transaction is______%. (Round to two decimal places.)
B) The annualized rate of return on this transaction is _____%. (Round to two decimal places.)
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