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You purchased 200 shares of Company ABC at $150 per share at the beginning of the year. You financed the purchase with 50% margin. During
You purchased 200 shares of Company ABC at $150 per share at the beginning of the year. You financed the purchase with 50% margin. During this year, Company XYZ distributed dividend of $1.5 per share. Suppose you incur 1% commission each time when you buy and sell the stocks, and the margin loan was at a rate of 5% per year. What is the rate of return on your investment if you sell shares at $105 per share at the end of the year?
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