Question
An investor purchased 2000 shares of the stock of a company for GH5.00 per share with a brokerage commission of 2.5% on the value of
An investor purchased 2000 shares of the stock of a company for GH5.00 per share with a brokerage commission of 2.5% on the value of the stock. Since the investors equity of GH6000 was not enough to pay for the total investment, the broker provided the remainder of the needed funds as loans with interest rate at 15% per annum. In the course of the year the company paid a dividend of GH1.00 per share. If the investor sold the shares at the end of exactly one year for GH6.00 per share, calculate,
(a) The total funds borrowed by the investor
(b) commission paid on purchase and sale of shares (c) the investors rate of return
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