Question
You are bullish on Telecom stock. The current market price is $50 per share, and you have $5,000 of your own to invest. You borrow
You are bullish on Telecom stock. The current market price is $50 per share, and you have $5,000 of your own to invest. You borrow an additional $5,000 from your broker at an interest rate of 8% per year and invest $10,000 in the stock.(LO 3-4)
- WhatwillbeyourrateofreturnifthepriceofTelecomstockgoesupby10%duringthenextyear?(Ignoretheexpecteddividend.)
the answer is 12%. please explain step by step how to reach this answer.
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
