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Return on Invested Capital Example 5: Assume you are going to buy 100 shares of stock at $50 per share. The stock pays $4 per
Return on Invested Capital Example 5: Assume you are going to buy 100 shares of stock at $50 per share. The stock pays $4 per share in annual dividends, during your 6-month holding period, you will receive half of that amount, or $2 per share. You are going to buy the stock with 60% margin and will pay 10% interest on the margin loan. a. If the price rises to $75 in 6 months, what is your return on invested capital? b. If the price drops to $25 in 6 months, what is your return on invested capital
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