An investor buys 200 shares of stock selling at $52 per share using a margin of 64%. The stock pays annual dividends of $1.00 per share. A margin loan can be obtained at an annual interes cost of 3.6%. Determine what return on invested capital the investor will realize if the price of the stock increases to $84 within six months. What is the annualized rate of return or this transaction? If the price of the stock increases to $84 within six months, the six-month return on this transaction is %. (Round to two decimal places.)

An investor buys 200 shares of stock selling at $52 per share using a margin of 64%. The stock pays annual dividends of $1.00 per share. A margin loan can be obtained at an annual interes cost of 3.6%. Determine what return on invested capital the investor will realize if the price of the stock increases to $84 within six months. What is the annualized rate of return or this transaction? If the price of the stock increases to $84 within six months, the six-month return on this transaction is %. (Round to two decimal places.)

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Description: An investor buys 200 shares of stock selling at $52 per share using a margin of 64%. The stock pays annual dividends of $1.00 per share. A margin loan can be obtained at an annual interestcost of 3.6%. Determine what return on invested capital the i

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 16P

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