Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is selling at $20 a share The broker charges a 10 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sale A year later you receive a $0 50 per share dividend...

Profit Ending Value Beginning Value Dividends Transaction Costs Interest Beginning Value of Invest ...

Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock

Question:

Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is selling at $20 a share. The charges a 10 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sale. A year later you receive a $0.50 per share and sell the stock for $27 a share. What is your rate of return on Francesca Industries?

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...