Question

An investor buys 300 shares of stock selling at ​$93 per share using a margin of...

An investor buys

300

shares of stock selling at

​$93

per share using a margin of

58​%.

The stock pays annual dividends of

$2.00

per share. A margin loan can be obtained at an annual interest cost of

7.3​%.

Determine what return on invested capital the investor will realize if the price of the stock increases to ​$102

within six months.

What is the annualized rate of return on this​ transaction?

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