USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 70

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 $35 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) 33.05 percent
• B) -33.05 percent
• C) -23.51 percent
• D) -25.35 percent
• E) -40.64 percent

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Definitions:

Medulla

The part of the brainstem that controls heartbeat, blood pressure, breathing, coughing, and swallowing.

Cerebellum

A part of the brain located at the back of the skull, primarily involved in coordinating movement and balance.

Homeostasis

The ability of an organism or a system to maintain stable internal conditions despite changes in external environments.

Sleeping

is a natural periodic state of rest for the mind and body, characterized by altered consciousness and reduced responsiveness to external stimuli.