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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