You Want to Purchase IBM Stock at $130 from Your

question 54

Multiple Choice

You want to purchase IBM stock at $130 from your broker using as little of your own money as possible. If initial margin is 50% and you have $19,500 to invest, how many shares can you buy?

• A) 150 shares
• B) 200 shares
• C) 300 shares
• D) 500 shares
• E) 25 shares

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Definitions:

Dividends Paid

Dividends paid are the portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.

Dividend Payout Ratio

A financial ratio that shows the percentage of earnings a company pays to its shareholders in the form of dividends.

Internal Growth Rate

The maximum rate at which a company can expand its operations using only internally generated funds, without resorting to external financing.

ROE

Return on Equity is an indicator of a company's profitability, demonstrating the amount of profit generated from the shareholders' investments.