I have a doubt since the CFAI practice exam and KS notes give a conflicting method. The CFAI suggests the formula is:
Market value of stock - Loan amount / Investor's own equity
The KS notes suggest:
Market Value of stock - Purchase Price (this numerator is basically capital gain) / Investor's own equity
Which one is correct?
Market value of stock - Loan amount / Investor's own equity
The KS notes suggest:
Market Value of stock - Purchase Price (this numerator is basically capital gain) / Investor's own equity
Which one is correct?