Question
Assume that JNJ stock is priced at $101 per share and pays a dividend of $3 per share. An investor purchases the stock on margin,
Assume that JNJ stock is priced at $101 per share and pays a dividend of $3 per share. An investor purchases the stock on margin, paying $80 per share and borrowing the remainder from the brokerage firm at 10 percent annualized interest. If after one year, the stock is sold at a price of $117 per share, what is the return to the investors?
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
8th edition
013342362X, 978-0133423624
