Question

Hiral bought 10,000 shares of LuLu at $40 per share, with an initial margin of 60%. He was charged 12% margin interest annually. Two years later he sold the stock for $80 per share. LuLu declared and paid a special dividend of $4 per share during the period Hiral held the stock. What was Hiral's holding period return?

100% |
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150% |
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167% |
||

183% |

Answer #1

An investor buys $10,000 worth of stock priced at $40 per share
using 60% initial margin. The broker charges 10% on the margin loan
and requires a 35% maintenance margin. The stock pays $2.00-per
share dividend in 1 year, and then the stock is sold at $50 per
share. What was the investors rate of return?

Tony bought 200 shares of Big Petroleum Company for $95 per
share and paid a commission of $60. He sold the stock five years
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per shares during this three months period. What is his approximate
percentage return on invested capital if the stock price went up by
5%?

An investor purchased 400 shares of a company at $30 per share.
The stock was bought on 65 percent margin (35 percent of the
purchase amount was borrowed). One month later, the investor had to
pay interest on the amount borrowed at a rate of 3 percent per
month. At that time, the investor received a dividend of $0.50 per
share. Immediately after receiving the dividend, he sold the shares
at $35 per share. The investor paid total commissions of...

An investor purchased 400 shares of a company at $30 per share.
The stock was bought on 65 percent margin (35 percent of the
purchase amount was borrowed). One month later, the investor had to
pay interest on the amount borrowed at a rate of 3 percent per
month. At that time, the investor received a dividend of $0.50 per
share. Immediately after receiving the dividend, he sold the shares
at $35 per share. The investor paid total commissions of...

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purchase amount was borrowed). One month later, the investor had to
pay interest on the amount borrowed at a rate of 3 percent per
month. At that time, the investor received a dividend of $0.6 per
share. Immediately after receiving the dividend, he sold the shares
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14- Jeff bought 100 shares of stock for $30.00 per share
on 70% margin. Assume Jeff holds the stock for one year and that
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commissions, what is his percentage return on invested capital if
he sells the stock for $34 a share?

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Not long ago, Jack Edwards bought 200 shares of Almost Anything
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to do a little pyrimiding and buy another 300 shares of the stock.
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