Question
The current market price of XYZ is $80/share, and you have $9,000 of your own to invest. You borrow an additional $9,000 from your brokers
The current market price of XYZ is $80/share, and you have $9,000 of your own to invest. You borrow an additional $9,000 from your brokers at an interest rate of 9% per year and invest $18,000 in the stock. What will be your rate of return if the price of XYZ stock goes up by 8% during the next year? The stock currently pays no dividends.
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The Dark Side Of Valuation
Authors: Aswath Damodaran
2nd Edition
0137126891, 9780137126897
