27. Shares of Star Inc. stock are selling for $45 per share. Brokerage commissions are 2% for purchases and 2% for sales. The interest rate on margin debt is 6.25% per year. The maintenance margin is 30%. At the end of one year shares of Star Inc. stock are selling for $55 per share and the company paid dividends of $0.85 per share. Assuming that 346 you paid the full cost of the purchase, what is your rate of return if you sell Star Inc. stock?* O A) 18.08% O B) 19.28% O C) 22.32% O D) 23.51% O E) None of thebove
27. Shares of Star Inc. stock are selling for $45 per share. Brokerage commissions are 2% for purchases and 2% for sales. The interest rate on margin debt is 6.25% per year. The maintenance margin is 30%. At the end of one year shares of Star Inc. stock are selling for $55 per share and the company paid dividends of $0.85 per share. Assuming that 346 you paid the full cost of the purchase, what is your rate of return if you sell Star Inc. stock?* O A) 18.08% O B) 19.28% O C) 22.32% O D) 23.51% O E) None of thebove
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![27. Shares of Star Inc. stock are selling for $45 per share. Brokerage commissions
are 2% for purchases and 2% for sales. The interest rate on margin debt is 6.25%
per year. The maintenance margin is 30%. At the end of one year shares of Star
Inc. stock are selling for $55 per share and the company paid dividends of $0.85
per share. Assuming that 346 you paid the full cost of the purchase, what is your
rate of return if you sell Star Inc. stock? *
O A) 18.08%
O B) 19.28%
C) 22.32%
D) 23.51%
E) None of theltbove](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F26e31426-6424-4850-9afa-c928b0d6bb12%2F10d9600a-02fb-4b9a-bbe7-fa00207ef28d%2Fhvt655_processed.jpeg&w=3840&q=75)
Transcribed Image Text:27. Shares of Star Inc. stock are selling for $45 per share. Brokerage commissions
are 2% for purchases and 2% for sales. The interest rate on margin debt is 6.25%
per year. The maintenance margin is 30%. At the end of one year shares of Star
Inc. stock are selling for $55 per share and the company paid dividends of $0.85
per share. Assuming that 346 you paid the full cost of the purchase, what is your
rate of return if you sell Star Inc. stock? *
O A) 18.08%
O B) 19.28%
C) 22.32%
D) 23.51%
E) None of theltbove
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