Seven months ago, you purchased 400 shares of stock on margin. The initial margin requirement on your account is 70 percent and the maintenance margin is 30 percent. The call money rate on the margin loan is 6.65 percent. The purchase price was $16 a share. Today, you sold these shares for $18.00 each. What is your annualized rate of return? O 64.64 percent O 56.87 percent O 33.35 percent O 42.77 percent O 29.39 percent
Seven months ago, you purchased 400 shares of stock on margin. The initial margin requirement on your account is 70 percent and the maintenance margin is 30 percent. The call money rate on the margin loan is 6.65 percent. The purchase price was $16 a share. Today, you sold these shares for $18.00 each. What is your annualized rate of return? O 64.64 percent O 56.87 percent O 33.35 percent O 42.77 percent O 29.39 percent
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 6P
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