The current market price for XYZ is $177 per share. Initial margin is 50%, maintenance margin is 35% and margin interest is 1.75% per year. XYZ pays annual cash dividends of $5.95 per share. You believe the stock price will increase over the next year and wish to trade long using margin. Suppose you are correct and the stock rises to $188 per share at the end of the year. 1.What is your percentage return on equity for this trade? 2.What is your percentage return on assets for this trade?
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
Get Answers For Free
Most questions answered within 1 hours.