FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that you buy 200 shares of Drinking Coffee Inc stock 50 percent margin when the stock is selling at $35 a share. The broker

Assume that you buy 200 shares of Drinking Coffee Inc stock 50 percent margin when the stock is selling at $35 a share. The broker charges a 4.5 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sale. A year later you receive a $1.80 per share dividend and sell the stock for $47 a share. What is your rate of return on DCI?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Value Investing

Value Investing

Authors: Mike Hartley

1st Edition

979-8864443309

More Books

Students also viewed these Finance questions

Question

7. Through the mentoring process, Alison is attempting to re-create models of her own career at Compucan by encouraging others to do as she has done. How might this approach affect attempts to secure...

Answered: 1 week ago

Question

★★★★★
Dewey Corporation owns 30 percent of the common stock of Jimm Company, which it purchased at underlying book value on January 1, 20X5. Dewey reported a balance of $245,000 for its investment in Jimm...

Answered: 1 week ago

Question

★★★★★
A 6% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 6.5407%. What is the bond's price? Do not round intermediate calculations. Round your answer...

Answered: 1 week ago

Question

★★★★★
5 poi Homework 3 1 eBook Help Save & Exit Submit Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone The gamelansare sold for $950 Selected data for...

Answered: 1 week ago

Question

★★★★★
The Kookie Kutter Bakery purchased $6,500 worth of baking supplies on June 2 and recorded the purchase as an expense. On June 30, an inventory of the baking supplies indicated $3,000 of supplies is...

Answered: 1 week ago

Question

★★★★★
A home office ships merchandise to the branch at 30% above cost. The allowance for overvaluation at the beginning of the year was P24,000 and at the end of the year, the balance before adjustment was...

Answered: 1 week ago

Question

★★★★★
Johnson Bookkeeping has a computer that was purchased July 1, 2019, for $1,800. Ms. Johnson thinks that the computer will be obsolete by June 30, 2021, and will have no value at that time. What is...

Answered: 1 week ago

Question

★★★★★
Below are a few transactions for Orion Energy (located in Manitowoc, WI), that relate to Orion's liabilities. Orion Energy has a December 31 fiscal year-end. 2021 Jan. 13 Orion Energy entered into a...

Answered: 1 week ago

Question

★★★★★
Do the Math 3-5 Construct Financial Statements Thomas Green, of Laramie, Wyoming, has been a retail salesclerk for six years. At age 35, he is divorced with one child, Amanda, age 7. Thomas' salary...

Answered: 1 week ago

Question

★★★★★
5. If an economy has many discouraged workers, a. the unemployment rate will be high, and the employment-to-population ratio will be low. b. the unemployment rate will be high, but the...

Answered: 1 week ago

Question

★★★★★
6. One explanation for the differing number of hours worked in the United States and western Europe is the a. higher level of taxes in Europe. b. stronger unions in the United States. c. greater...

Answered: 1 week ago

Question

★★★★★
3. Give three explanations of why the real wage may remain above the level that equilibrates labor supply and labor demand.

Answered: 1 week ago

Previous Question Next Question