Rayone Corp. stock is currently trading at $40 per share. To short the stock, the broker charges
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Question:
Rayone Corp. stock is currently trading at $40 per share. To short the stock, the broker charges the client a stock borrow fee of 1% p.a,, charged at the time the position is covered. It has announced, but not yet paid, its annual cash dividend of $1.50 per share. The broker IMR is 60% and MMR is 35% for short sales.
Client A sells short 200 shares of Rayone Corp. stock at $40. Client A covers the position after one year at a share price of $30. What was the client's holding period rate of return?
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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