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meriva
2 years ago
15

The current price of the Volkswagen ADR (VWAGY) is 35.50. You purchase 50 shares on margin. You finance half of the purchase you

rself and borrow the other half from your broker at an annual interest rate of 6.0%. Assume that the ADR pays an annual dividend of 0.56 per share. If the price in one year is 42, what is the return on your investment (keep in mind that you need to pay interest on the loan)
Business
1 answer:
Zinaida [17]2 years ago
5 0

Answer:

33.77%

Explanation:

In one year, you are going to receive ($42 x 100) + ($0.56 x 100) = $4,256

you must return ($35.50 x 50) = $1,775

plus interests = $1,775 x 6% = $106.50

total return = $4,256 - $1,775 - $106.50 = $2,374.50

you invested $1,775

return on your investment = ($2,374.50 / $1,775) - 1 = 33.77%

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True

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last year minden company introduced a new product and sold 15,000 units of it at a price of $70 per unit. the product's variable
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Learn more about the company  here

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• what downsizing targeting methods do you feel are the most effective? • which are the least effective, and why? • if you had t
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