Looking back at Problem 12, suppose the call money rate is 6 percent and your broker charges

Question:

Looking back at Problem 12, suppose the call money rate is 6 percent and your charges you a spread of 1.25 percent over this rate. You hold the stock for six months and sell at a price of $53 per share. The company paid a of $.25 per share the day before you sold your stock. What is your total dollar return from this investment? What is your effective annual rate of return?

Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...