Exhibit 4.7 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 56

Multiple Choice

Exhibit 4.7
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2% for purchases and 2% for sales. The interest rate on margin debt is 6.25% per year. The maintenance margin is 30%.
-Refer to Exhibit 4.7.At the end of one year shares of RossCorp stock are selling for $55 per share and the company paid dividends of $0.85 per share.Assuming that you paid the full cost of the purchase,what is your rate of return if you sell RossCorp stock?

• A) 18.08%
• B) 23.51%
• C) 22.32%
• D) 14.96%
• E) 19.28%

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Definitions:

Min Function

A mathematical function used to determine the smallest value among a set of numbers or inputs.

Income

A measure of money received on a regular basis, either through employment, business, investments, or other sources.

Price of X

The specific cost or value associated with a particular item or commodity, denoted as "X."

Price of Y

The monetary cost or value assigned to a good or service, labeled as 'Y'.