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Ming purchased 1,000 shares of ABC Inc. for $10 per share using $5,000 of her own cash along with a $5,000 loan. At the end
Ming purchased 1,000 shares of ABC Inc. for $10 per share using $5,000 of her own cash along with a $5,000 loan. At the end of four years she sold the shares for $13 per share and had fully repaid the loan. Over her four- year holding period Ming earned dividends totaling $1.50 per share and she paid total interest of $600.00 on the loan. (Disregard commissions.) Required (show all calculations): i. (3 marks) Compute the taxable capital gain on sale of the shares. ii. (4 marks) Compute Ming's net return on her investment (in percentage terms) over her fouryear holding period (ignore taxes)
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