26. An investor puts up $5,000 but borrows an equal amount of money from their broker to double the amount invested in ABC stock. The broker charges 7% on the loan. The stock was originally purchased at $25 per share and in one year the investor sells the stock for $28. The trading cost is $0.2 per share. ABC stock pays dividends of $0.4 per share. The investor's rate of return was 16.8% 17% 18.6% 16%

Q: On 1 June, shares in Blue.com traded at $30.58. Your broker allowed you to buy the shares on margin…

A: Given: Purchase price = $30.58 Closing price = $26.42 Initial margin = 60%

Q: You’ve just opened a margin account with $13,475 at your local brokerage firm. You instruct your…

A: Step 1: Calculate the Total Purchase Price of the StockTotal Purchase Price =Number of Shares×Price…

Q: Marty's stock broker sent him a report on a stock currently selling at $25.00. The expected dividend…

A: The holding period return is a concept that is used to calculate the strawberry return of the day…

Q: Suppose that the shares of a company are being traded at a price of 70 Euros per share. The company…

A: Purchase price: €70Dividend per share: €2Amount contributed: €55Interest rate: 20%Selling price: €90

Q: Use the commission schedule from Company A shown in the table to find the annual rate of interest…

A: Here,No. of Shares is 330 sharesPurchase Price of Shares is $10.69Selling Price of Share is $18.91

Q: Michael's, Incorporated, just paid $3.70 to its shareholders as the annual dividend. Simultaneously,…

A: Current Share Price: The current price of a stock, currency, commodity, or precious metal that is…

Q: An investor buys 200 shares of stock selling at ​$71 per share using a margin of ​70%. The stock…

A: STEP 1 A rate of return for a time period that is shorter than a year but is calculated as if it…

Q: An investor sells short 500 shares of stock at 10 per share and covers the short position one year…

A: Short selling can be defined as the process of selling off the shares in expectation that price of…

Q: Suppose that you opened a margin account (margin requirement = 60%) with your brokerage firm.…

A: STEP 1 The gain or loss of an investment over a given time period, represented as a percentage of…

Q: You purchased 74 shares of Z stock in January 2008 for $40 per share. Each year you recelved a cash…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 17) Quentin purchased 600 shares of stock on margin for $25.38 a share and sold the shares seven…

A: Step 1: Given that, Number of shares purchased = 600 Purchase price per share = $25.38 Selling price…

Q: An investor buys 100 shared of stocks on margin price at a price of $70 per share. The initial mar…

A:

Q: You purchased 300 shares of a non-dividend paying stock at $50.00 per share using 50% margin at a…

A: Total Value of Shares purchased = Number of shares * Purchase price per share = 300 Shares * $50 =…

Q: Davin Wenig, an investor with a 13% required rate of return, wants to buy shares of eBay (ticker…

A: The dividend discount model is a technique that helps to compute the current value of the stock…

Q: You purchase 60 shares for $60 a share ($3,600), and after a year the price falls to $55. Calculate…

A: The return on investment is a measurement used to quantify how much income or amount of money an…

Q: 8 Months ago you bought 500 shares of stock on margin of $82. The initial margin requirement on the…

A: We need to calculate the initial investment. This is given by: Initial investment = 500 × $ 82 × .60…

Q: Suppose you sold short 100 shares of some stock on January 1 at a price of $30 per share. A dividend…

A: Gain on Sale = Sale Price of Shares - Cost of acquisition of Share - Transaction cost

Q: Suppose the call money rate is 4.5 percent, and you pay a spread of 2.5 percent over that. You buy…

A: The interest rate at which banks and other financial organizations lend and borrow money from one…

Q: Asonia Co. will pay a dividend of $4.30, $8.40, $11.25, and $13.40 per share for each of the next…

A: Year 0 = Current Year dividend ( which is already accrued in previous year only payment is…

Q: An investor buys $20,000 worth of a stock priced at $25 per share using 80% initial margin. The…

A: Purchase worth = $20,000 Price of stock = $25 Initial margin = 80% Broker charge = 5% Maintenance…

Q: At the beginning of last year an investor purchased 300 shares of common stock from MRP Corporation…

A: Rate of return is that rate of return which is earned by the investor on his investment. It includes…

Q: An investor buys $10,000 worth of a stock priced at $40 per share using 70% initial margin. The…

A: Value of Purchase = $10000 Stick Price = $40 per share Number of Share =10000/40 = 250 Initial…

Q: Determine what return on invested capital the investor will realize if the price of the stock…

A: The annualized rate of return is an investment's performance over a period of time, often longer…

Q: An investor buys $10,000 worth of a stock priced at $40 per share using 70% initial margin. The…

A: Given information: Investment : $10,000 Stock price: $40 Initial margin: 70% Broker fees : 10%…

Q: Use the commission schedule from Company A shown in the table to find the annual rate of interest…

A: The rate of return on the stock refers to the annual profits provided by the stock to the investors.…

Q: An investor buys $17 thousand dollars of ABT stock at $20 per share, using 58% initial margin. The…

A: The margin account refers to the account where an investor can purchase stocks while paying only…

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.