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

Question

1 Approved Answer

LG6 P2.13 An investor buys 200 shares of stock selling at $80 per share using a margin of 60%. The stock pays annual dividends of

image text in transcribed

LG6 P2.13 An investor buys 200 shares of stock selling at $80 per share using a margin of 60%. The stock pays annual dividends of $1 per share. A margin loan can be obtained at an annual interest cost of 8%. Determine what return on invested capital the investor will realize if the price of the stock increases to $104 within six months. What is the annualized rate of return on this transaction

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

The Technology Procurement Handbook A Practical Guide To Digital Buying

The Technology Procurement Handbook A Practical Guide To Digital Buying

Authors: Sergii Dovgalenko

1st Edition

1789662125, 978-1789662122

More Books

Students also viewed these Finance questions

Question

★★★★★
The number of pages printed before replacing the cartridge in a laser printer is normally distributed with a mean of 11,500 pages and a standard deviation of 800 pages. A new cartridge has just been...

Answered: 1 week ago

Question

★★★★★
audit of current liabilities Case 1 Yusuke Corporation records its purchases at gross amounts but wishes to change to recording of purchases net of purchase discounts. Discounts on purchases recorded...

Answered: 1 week ago

Question

★★★★★
A4.5 Explain the impact on financial statements of each of the following: (Section 4.5) (a) company law; (b) the International Accounting Standards Board; and (c) the UK tax law.

Answered: 1 week ago

Question

★★★★★
On January 1, 2012, Pedraza Corporation issued $1,000,000 face value, 6%, 10-year bonds at $1,077,217. This price resulted in an effective-interest rate of 5% on the bonds. Pedraza uses the...

Answered: 1 week ago

Question

★★★★★
LG6 P2.13 An investor buys 200 shares of stock selling at $80 per share using a margin of 60%. The stock pays annual dividends of $1 per share. A margin loan can be obtained at an annual interest...

Answered: 1 week ago

Question

★★★★★
B Section B of the MAC clause originally reads as follows: Other than with respect to changes to Applicable Laws related to hydraulic fracturing or similar processes that would reasonably be expected...

Answered: 1 week ago

Question

★★★★★
In the case: In deep Water: Boardroom Tussle at Asia Water Technology - Whether Venkataramana should have petitioned for unfair prejudice remedy instead of trying to remove the directors of Asia...

Answered: 1 week ago

Question

★★★★★
A monopsonist's demand for labor can be written as VMPE = 40 - 0.005ED. Labor is supplied to the firm according to w = 5 + 0.01ES. Thus, the firm's marginal cost of hiring workers when it hires off...

Answered: 1 week ago

Question

★★★★★
Blake Shook started a second business selling beekeeping supplies and teaching beekeeping classes. Texas Bee Supply was started with his parents when they invested in the company by gifting Blake a...

Answered: 1 week ago

Question

★★★★★
Collectively, the 1000 residents of Green Valley value swimming in Blue Lake at $100,000. A nearby factory pollutes the lake water, and would have to pay $50,000 for non-polluting equipment....

Answered: 1 week ago

Question

★★★★★
s 3-13. How should Amy respond, if at all, to the employee emails? 3-14. What systematic changes, if any, should Amy make to address the economic viability of Ohio Strong during this tumultuous...

Answered: 1 week ago

Question

★★★★★
identify and describe the techniques that can be used to enhance employee involvement

Answered: 1 week ago

Question

★★★★★
understand the key employment relations concepts of partnership, participation, employee involvement, commitment, engagement and high-performance working

Answered: 1 week ago

Question

★★★★★
describe the concepts of commitment and employee engagement, and explain how they are related to employee involvement and high-performance working.

Answered: 1 week ago

Previous Question Next Question