you have 5000 shares of Aramco stock. One year ago, each share of the stock was...

you have 5000 shares of Aramco stock. One year ago, each share of the stock was worth SR 40. Aramco has offered to buy back your shares for SR225, 000. The interest rate, which Aramco offered, is closest to:

	A.	0.115
	B.	0.125
	C.	0.135
	D.	0.105

Solutions

Expert Solution

Answer - 0.125

Calculation

No. of shares : 5000

Each share cost : 40

Value : No. of shares * Each shares Cost

= 5000* 40

= 200000

BuyBack Price : 225000

Interest Rate = (225000-200000)/200000

= 0.125

Hence , Interest Rate which Aramco offered is closest to 0.125

and all other option are incorrect as per calcu

Rahul Sunny answered 2 years ago

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