Calculate Return On Investment
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Question
Assume that ABC stock is priced at $115 per share and pays a dividend of $2.83 per share. An investor purchases the stock on margin, paying $72 per share and borrowing the remainder from the brokerage firm at 10 percent annualized interest. If after one year, the stock is sold at a price of $129 per share, what is the return to the investor?
Summary
The question belongs to Finance and it is about calculation of return on stock. In this example, an investor buys stock with personal and borrowed money. If the stock pays a good return after one year, calculate the return on the stock.
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