USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 39

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2 percent for purchases and 2 percent for sales. The interest rate on margin debt is 6.25 percent per year. The maintenance margin is 30 percent.
-Refer to Exhibit 3.7. 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 borrowed 25 percent of cost of the purchase, what is your rate of return?

• A) -23.51 percent
• B) 29.35 percent
• C) 23.51 percent
• D) 5.21 percent
• E) 10.06 percent

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Definitions:

Self-Control

Self-discipline involves managing one's feelings, thoughts, and actions despite the presence of temptations and urges.

Alcohol Consumption

The intake of beverages containing ethanol, which can affect the body and mind in various ways, depending on the amount and frequency of consumption.

Daily Exercise

Engaging in physical activities every day to improve or maintain fitness and overall health.

Personal Control

An individual's belief in their capacity to influence and control events in their own life, impacting motivation and psychological well-being.