Jeff bought 100 shares of stock for $30.00 per share on 70% margin. Assume Jeff holds the stock for one year and that his interest costs will be $45 over the holding period. Jeff also received dividends amounting to $0.30 per share. Ignoring commissions, what is his percentage return on invested capital if he sells the stock for $34 a share?

Jeff bought 100 shares of stock for $30.00 per share on 70% margin. Assume Jeff holds the stock for one year and that his interest costs will be $45 over the holding period. Jeff also received dividends amounting to $0.30 per share. Ignoring commissions, what is his percentage return on invested capital if he sells the stock for $34 a share?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 2PROB

See similar textbooks

Similar questions

What is Rate of Return? Adam is a retail investor and decides to purchase 10 shares of Company A at a per-unit price of $20. Adam holds onto shares of Company A for two years. In that time frame, Company A paid yearly dividends of $1 per share. After holding them for two years, Adam decides to sell all 10 shares of Company A at an ex-dividend price of $25. Adam would like to determine the rate of return during the two years he owned the shares.
This morning Sophia sold 500 shares of Multiface Consulting for $75.60 per share. She purchased the stock for $70 one year ago. During the time she held the stock, Sophia received two dividend payments; one dividend payment was $1.00 per share and the other dividend payment was $1.10 per share. What yield (rate of return) did Sophia earn on her investment for the year she held the Multiface stock?
Last year, Carlotta bought five shares of Spot-Off Cleaners for $85 each. During the year, Carlotta recieved one cash dividend equal to $5.10 per share. Earlier today, she sold the stock for $88.40. (a) What rate of return did Carlotta earn on her investment? (b) What were the (1) dividend yield and (2) the capital gains tield associated with holding the stock?
Dan bought 200 shares of a stock at P140 per share. A year later, he sold the stocks at P145.50 a share. 6. How much money did Dan make on the sale (excluding buying and selling charges)? 7. Assuming that Dan did not receive dividends, what is his total stock ROI (excluding charges)? 8. If during the year he held the stock, Dan received P2.25 dividend per share, what is his total stock ROI (excluding charges)?
Nancy Cotton bought 400 shares of NeTalk for $15 per share. One year later, Nancy sold the stock for $21 per share, just after she received a $0.90 cash dividend from the company. a. What is the total dollar return earned by Nancy for the year? b. What is the rate of return earned by Nancy?
Ryan Neal bought 1,400 shares of Ford at $15.82 per share. Assume a commission of 3% of the purchase price. Ryan sells the stock for $20.13 with the same 3% commission rate. What is the gain or loss for Ryan? (Input the amount as a positive value. Round your answer to the nearest cent.)
Amy bought 100 shares of ABC Co. stock for RM58.00 per share on 60% margin.Assume she holds the stock for one year and that her interest costs will be $160over the holding period. Ignoring commissions, what is her percentage return oninvested capital if the stock price went down 10%?
Last year Vivienne bought 100 shares of Holding Corporation common stock for $43 per share. During the year he received dividends of $1.30 per share. The stock is currently selling for $50 per share. What rate of return did Vivienne earn over the year?
JT purchases 1,000 shares of stock at $23.50 per share in January 2006. He sells the 1,000 shares inJanuary 2110 for $35.50 per share. What is his internal rate of return?
Lauren short sells 100 shares of XYZ at $52 with a 50% initial margin. She then bays back the stock for $48. If her broker charges 2% of the borrowed amount, what is her percentage profit or loss?
Becky Martinez owns stock in GBX Corporation. The GBX stock has a current market value of $70 a share. If Becky receives $1.40 a year in dividends, what is the dividend yield?
Tiffany bought a stock for $80 and company paid no dividend. At the end of the year she sold the stock for $60. For the holding time, how much return this stock generated for her? She wanted a 35% return on this stock when purchased. At what selling price, she would have generated that return?