Assume That a Stock Is Priced at $50 and Pays

Multiple Choice

Assume that a stock is priced at $50 and pays an annual dividend of $2 per share. An investor purchases the stock on margin, paying $25 per share and borrowing the remainder from the brokerage firm at 9 percent annual interest. If, after one year, the stock is sold at a price of $65.25 per share, the return on the stock is

A) 60 percent.
B) 44 percent.
C) 30 percent.
D) 69 percent.