Hmm .. interesting!

Is there something with Maths below?

Powerful ROC from leveraging?

For example; if one has $110K capital to invest.


Without margin account:

One can fully invest $110K for e.g. 7% dividend yield

 

Leverage on margin account :

1. One can invest $100K for e.g. 7% dividend yield.

2. Leverage $40K on margin account at net 3.5% dividend yield after offsetting 3.5% interests payable to broker.

3. $10K as cash reserve to top up margin call when necessary

 

Does leveraging on margin account to improve yield on own capital look fantastic?

Really?

Or something wrong with the Maths?