You are 100% confident about three pieces of information as follows:

1) the current stock price of H&M company 99 dollars

2) the amount of dividends H&M will pay next year (H&M will pay dividends on an annual basis): 23 dollars

3) the stock price of H&M one year later:96 dollars

Though you are broke. as a prestigious business school student, you can borrow money from the bank at a risk-free rate 2.0%.You can also borrow shares of H&M from a brokerage company, and should return the shares in a year with a risk-free rate on the current value of shares.

What profit/loss can you make of this situation?

Answer rating: 100% (QA)

This is an interesting financial puzzle Based on the information you provided heres how you can anal... View the full answer