You sell short 200 shares at 50 per share you post the 50, Ask an Expert

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You sell short 200 shares at $50 per share. You post the 50% margin required for the short sale. Assume you earn no interest on your margin funds, nor pay any interest on the loan of shares. The company stock pays dividends of $0.49 per share every quarter. What is your rate of return on this position, if you close it out at $42 per share after one year?

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Financial Management, Finance

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