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Percentage return on equity for trade

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Reference no: EM132627147

The current market price for ABC is $49 per share. Initial margin is 50%, maintenance margin is 35% and there is no margin interest. ABC pays annual cash dividends of $2.75 per share. You believe the stock price will decrease over the next year and wish to sell short using margin. Suppose you are correct and the stock falls to $38 per share at the end of the year. What is your percentage return on equity for this trade? Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.

Reference no: EM132627147

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