Suppose You Purchase 500 Shares of Stock at 48

Margin loan 24000 8000 16000 Margin call price 16000 500 30 500 4571 To meet a margin call. B What is your effective annual return.

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A If you exercise your preemptive rights how many of the new shares can you purchase.

. One year later the stock is selling for 60 per share and you close out your position. Suppose you purchase 500 shares of stock at 48 per share with an initial cash investment of 8000. The firm announces a plan to sell an additional 25 million shares through a rights offering.

Amount borrowed 1200 341 55 18 Margin call price 18360 1200 1 35 23. Fundamentals of Investments 7th Edition Edit edition Solutions for Chapter 2 Problem 13QP. Market value of stock before rights offering 35.

Calculate your return on investment if the share price is. Outstanding shares 25 million. Suppose you purchase 5000 shares of a closed-end mutual fund.

Quiz Step by Step 5 Business - Management. You buy 1200 shares of stock at 48 per share. Assume you purchased 500 shares of XYZ common stock on margin at 40 per share from your broker.

There is no limit to what you can make because there is no maximum value for your shares - they can increase in value without limit. Compute your total dollar return on this investment. Amount borrowed 500 38 - 500 3860 7 Margin call price 7600 500 1 3 21.

You buy 500 shares of stock at a price of 94 and an initial margin of 50 percent. Suppose you purchase 5000 shares of a closed-end mutual fund at its initial public offering. Suppose the call money rate is 45 percent and you pay a spread of 25 percent over that.

Proceeds from sale 50056 28000. The call money rate is 5 percent and you are charged a 15 percent premium over this rate. If your broker requires a 30 percent maintenance margin at what share price will you be subject to a margin call the interest rate on the margin loan is zero.

Number of common stock shares owned 50000. Four months later the stock price was 18. Total dollar return 500 42 41 36 680 Whether you choose to sell the stock or not does not affect the gain or loss for the year.

Suppose you purchase 500 shares of stock at 48 per share with an initial cash investment of 8000. Whether you choose to do so or not is irrelevant ignoring commissions and taxes. Dollar return 28000 - 8000 - 16000 - 1040 2960.

Suppose the call money rate is 5 and you are charged with a 15 premium over this rate. 242500 shares 60000 Account Equity 60k -20K 40000 Margin 4000060000 6667 c Total value of stock will be. If the initial margin is 60 the amount you borrowed from the broker is _____.

The offering prospectus discloses that the fund promoter gets an 8 percent fee from the offering. Suppose you purchase 5000 shares of a closed-end mutual fund at its initial public offering. Suppose you purchase 500 shares of stock at 48 per share with an initial cash investment of 8000.

The offering prospectus discloses that the fund promoter gets an 8 percent fee from the offering. Do not round intermediate calculations. The initial margin is 60.

Suppose you own 100000 shares of common stock in a firm with 125 million total shares outstanding. If your broker requires a maintenance margin of 30 percent at what share price will you be subject to a margin call. This is the most you can lose because the worst that could happen is that the company could go bankrupt leaving you with worthless shares.

142500 35000 Account Equity 35000 -20000 15000. Of shares purchased are 500 The price of shares of time pusshase 48 share. A What is your holding period return.

The market value of the stock is 2250 before the rights offering and the new shares are being offered to existing shareholders at a 240 discount. Suppose you bought 500 shares of a stock at an initial price of 15 per share. You must put up _____.

The offer price is 28 per share. Suppose you did not receive dividends. You put up 23000.

The call money rate is 5 percent and you are charged a. Long position When price goes down you lost When prices goes up you gain When the price dropped from 48 to 4571 you face losses but your account standing is still fine Once the stock price drops below 4571 you receive a margin call from the broker 3 Alternatives. What is the return.

If the maintenance margin is 40 percent at what price will you receive a margin call. After tax return 4-52 Ans CS Scanned down year CamSch 13 Given data No. Suppose you purchase 500 shares of stock at 48 per share with an initial cash investment of 8000.

You sold short 300 shares of common stock at 30 per share. If the capital gains tax is 28 percent your tax liability is. Suppose you purchase 500 shares of stock at 48 per share with an initial cash investment of 8000.

Net stock price for existing shareholders 5 discount 35 - 5 30. What is your return assuming a dividend of 24 per share is paid. If your broker requires a 30 percent maintenance margin at what share price will you be subject to a margin call.

Margin loan 53 275 8000 6 Margin requirement 8000 53 275 5489 or 54. Suppose you bought 1050 shares of stock at an initial price of 55 per share. Number of shares 50000 20 per share 2500 shares b Marginal Loan fixed 50000-30000 20000 If share price rises to 24 total value of stock will be.

Your stock is worth what it would bring if you sold it. If your broker requires a 30 maintenance margin at what share price will you be subject to a margin call. Calculate your return on investment one year later.

Rate of return 2960 8000 3700. If you buy go long 500 shares at 18 you have a total of 9000 invested. To meet the margin call you can deposit additional cash into your trading account dont have additional.

Initial Investment 800 0 maintenance mosgin 30 No Margin Call Piree Initial Price x 1 - Initial Investment Nog shares x Purchase prices of share 1 - maintenance margin 800 0 48x 500 x 48 1- 30 48 1 - 0333. Additional shares 1 million. Suppose you purchased 100 shares of stock in 2010 for 25 a share and you sell them today for 50 a share.

Interest on loan 160001065 - 16000 1040. The stock paid a dividend of 64 per share during the following year and the share price at the end of the year was 50. Without margin rate of return 56 - 48 48 1667.

Margin Call Suppose you purchase 500 shares of stock at 48 per share with an initial cash investment of 8000. The offer price is 10 per share. A negative value should be indicated by a minus sign b.

Round your answer to 2 decimal. 48 items by Kayla. If this fund sells at a 12 percent.

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