Question
Marvin likes to trade on margin. On January 3, 2011, Marvin purchased 200 shares of ABC Corporation common stock at a $15 per share price.
Marvin likes to trade on margin. On January 3, 2011, Marvin purchased 200 shares of ABC Corporation common stock at a $15 per share price. The margin requirement is 50%, and Marvin pays a commission rate equal to 2% of any purchase cost or sale. Marvin must pay his broker 10% interest on his margin account. If Marvin sells the stock exactly one year later at a $20 per share price, and ABC pays total cash dividends over the one year period of $.40 per share, what was the percentage return (excluding capital gains taxes) that Marvin earned on the margin purchase?
30.72% |
33.33% |
36.00% |
51.44% |
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