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The exhibit is the paragraph before the question Exhibit 3.7 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM Shares of RossCorp stock are selling for

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The exhibit is the paragraph before the question

Exhibit 3.7 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2 percent for purchases and 2 percent for sales. The interest rate on margin debt is 6.25 percent per year. The maintenance margin is 30 percent. Refer to Exhibit 3.7. At the end of one year, shares of RossCorp stock are selling for $55 per share and the company paid dividends of $0.85 per share. Assuming that you borrowed 25 percent of cost of the purchase, what is your rate of return? a. 29.35 percent b. 10.06 percent c. 5.21 percent d. -23.51 percent e. 23.51 percent

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