Multiple Choice
Assume a stock is initially priced at $50, and pays an annual $2 dividend. An investor uses cash to pay $25 a share and borrows the remaining funds at a 12 percent annual interest. What is the return if the investor sells the stock for $55 at the end of one year?
A) 50 percent
B) 30 percent
C) 10 percent
D) 16 percent
E) 8 percent
Correct Answer:
Verified
Correct Answer:
Verified
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