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Assume that Brady stock is selling at $100 per share and pays a dividend of $3 per share. Margarita buys the stock on margin, putting
Assume that Brady stock is selling at $100 per share and pays a dividend of $3 per share. Margarita buys the stock on margin, putting up $70 in cash and borrowing the remainder. The margin loan has an interest rate of 5%. One year later, Brady stock is trading at $80 per share. What is Margaritas rate of return?
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