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What is the annualized rate of return on the transaction

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Question: An investor buys 200 shares of stock selling at $80 per share using a margin of 60%. The stock pays annual dividends of $1 per share. A margin loan can be obtained at an annual interest cost of 8%. Determine what return on invested capital the investor will realize if the price of the stock increases to $104 within six months. What is the annualized rate of return on this transaction?

Reference no: EM131624051

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