ear ago, you have short-sold 4000 shares of Stock Z, which was trading at $150 per share. After a year, Stock Z pays a yearly dividend of $4 per share, and the interest rate is 10%. What price would you get a margin call if the maintenance margin is 30%
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A year ago, you have short-sold 4000 shares of Stock Z, which was trading at $150 per share. After a year, Stock Z pays a yearly dividend of $4 per share, and the interest rate is 10%.
What price would you get a margin call if the maintenance margin is 30%?
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- Suppose you purchase 500 shares of Blue Acre, which currently trading at $60 per share. Suppose that after one year the price of Blue Acre rose to $75. You purchased this stock on margin and the margin account had 70% initial margin. The margin loan has an APR of 8% and is compounded monthly. What is your return?An investor buys $17 thousand dollars of ABT stock at $20 per share, using 58% initial margin. The broker charges 6% APR compounded daily on the loan, and requires a 35% maintenance margin. The stock pays $0.85 per share dividend each year. If the stock is sold at the end of the year at $21 per share, what is the investor's rate of return?An investor buys $10,000 worth of a stock priced at $40 per share using 70% initial margin. The broker charges-10% on the margin loan and requires a 40% maintenance margin. In one year the investor gets a margin call. You will get a margin call if the stock drops below
- An investor buys $10,000 worth of a stock priced at $40 per share using 70% initial margin. The broker charges 10% on the margin loan and requires a 40% maintenance margin. In one year the investor gets a margin call. At the time of the margin call the stock's price must have beenThe earnings of Eastern Corp. are expected to grow at an annual rate of 12% over the next 5 years and then slow to a constant rate of 8% per year. The company currently pays a dividend of $0.36 per share. What is the value of the company’s stock to an investor who requires a 14% rate of return? If the stock has a market price of $15, do you buy it ?CEPS Group just paid an annual dividend of OMR 3.25 per share. Today, the company announced that future dividends will be increasing by 1.45 percent annually. If you require a 10 percent rate of return, how much are you willing to pay to purchase one share of this stock today?
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- How much are you willing to pay for one share of Delphia stock if the company just paid a $1.34 annual dividend, the dividends increase by 2.8 percent annually, and you require a 14 percent rate of return?6. Two years ago, you bought 300 shares of Kayleigh Milk Co. for $30 a share with a marginof 60 percent. Currently, the Kayleigh stock is selling for $45 a share. Assuming no divi-dends and ignoring commissions, compute (a) the annualized rate of return on this invest-ment if you had paid cash, and (b) your rate of return with the margin purchase.Smiling Elephant, Inc., has an issue of preffered stock outstanding that pays a $5.00 dividend every year, in perpetuity. If this issue currently sells for $80.10 per share, what is the required return?