You want to purchase a common stock at $50 from your broker using as little of your own money as possible. If initial margin is 50% and you have $100000 to invest, how many shares can you buy?"
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- 18.a. What do you understand by dividend discount model?b. Hal wants to buy 500 shares of Xenon Corporation's common stock. Xenon's next dividend payable one year from today, is expected to be $3.50 per share. The dividend is expected to grow at a 2 percent rate for the foreseeable future.i) If the investor-required rate of return is 16 percent, what will be the price per share of Xenon's common stock today?ii) Hal expects to hold the stock for only two years. What is the estimated selling price of the stock two years from today?Y6 Consider a stock priced at $40 that pays an annual dividend of $ 1 per share. An investor purchases the stock on margin, paying $20 per share and borrowing the remainder from the brokerage firm at 10 percent annual interest. a. If, after one year, the stock is sold at a price of $60 per share, what is the return on the stock? b. If investors had used only personal funds rather than borrowing funds, what would have been the stock return?Margin %: Your margin account requires an initial margin of 50%, and a maintenance margin of 30%. You deposit $83,000 cash in a brokerage account and purchase stocks using all available margin and borrowing the rest from your broker. Later, the value of your stock holdings rises to $184,000. What is your percent return? O. 100.00% O. 10.84% O. 121.69% O. 21.69%
- Question 20 You want to purchase some shares of Auto Board stock but need a 15% rate of return to compensate for the perceived risk of such ownership. What is the maximum you are willing to spend per share to buy this stock if the company pays a constant R4,90 annual dividend per share? 1. R25,40 2. R32,67 3. R59,33 4. R70,87chapter 15 #7 Assume that an investor has $10,000 to invest. Stock can be purchased at $20 per share (500 shares can be purchased). Call options to purchase 100 shares at a price of $25 can be purchased for $500 (options to produce 2,000 shares can be purchased). Compare the change in the investor’s wealth from buying the stock and buying the options if the stock price at the expiration of the option is: $35. $24.kau.5 You expect a stock to pay dividends of $0.80, $1.20, $1.85, $2.00 over the next 4 years. You will receive the first dividend exactly 1 var from now. You expect the stock to sell for a price of $47.75 four vears from now. If the required return is 12%, what is the price of the stock today? Please use excel and show the formula used
- Q.An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin. The broker charges 8% on the margin loan and requires a 35% maintenance margin. The stock pays a $1-per-share dividend in 1 year, and then the stock is sold at $23 per share. What was the investor's rate of return? Which one is correct: A.21.63% B.25.28% C.23.83% D.28%8. I need help with finance home work question asap please A stock that currently sells for $150 has a required return of 11.45% and dividend yield of 3%. What dividend per share amount is expected to be paid next?Suppose you are thinking of purchasing the SunStar’s common stock today. If you expect SunStar to pay $0.80 dividend at the end of year one and $1.6 dividend at the end of year two and you believe that you can sell the stock for $15 at that time. If you required return on this investment is 10%, how much will you be willing to pay for the stock? a. $13.95 b. $14.44 c. 14.19 d. $15.51
- C) usually with the assistance of an investment banker. D) A and B. E) B and C. 2. You purchased 100 shares of ABC common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin. A) $21 B) $50 C) $49 D) $80 E) none of the above 3. Assume you sell short 100 shares of common stock at $45 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at $40/share? The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction. A) 20% B) 25% C) 22% D) 77% E) none of the above 4. You purchased 1000 shares of common stock on margin at $30 per share. Assume the initial margin is 50% and the stock pays no dividend. What would the maintenance margin be if a margin call is made at a stock price of $24?Q-1. (A)Your broker offers to sell you some shares of Bahnsen & Co. common stock thatpaid a dividend of $3.5 yesterday. Bahnsen’s dividend is expected to grow at 10%, 12%and 18% per year for the next 3 years respectively. If you buy the stock, you plan tohold it for 3 years and then sell it. Bahnsen’s beta is β = 1.8, risk free rate is RF = 6.5%and risk-premium on market is RPM = 7%.i. Find the expected dividend for each of the next 3 years.ii. Given that the first dividend payment will occur 1 year from now, find the presentvalue of the dividend stream and then sum these PVs.iii. You expect the price of the stock 3 years from now to be $65.00. Discounted at arequired rate of return, what is the present value of this expected future stock price?iv. If you plan to buy the stock, hold it for 3 years, and then sell it for $65.00, what is themost you should pay for it today?v. Using constant dividend growth model, calculate the price of this stock today. Assumethat g is 8% and that it…2. Answer both questions: a. You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end. What is the rate of return on your investment if the year-end stock prices turn out to be $38, $40, and $42? What is your real (inflation-adjusted) rate of return in each case, assuming an inflation rate of 3%? b. Consider the following information on the returns on stock and bond investment. Scenario Profitability Stocks Bonds Recession .2 -5% +14% Normal Economy .6 +15% +8% Boom .2 +25% +4% i) Calculate the expected rate of return and standard deviation in each investment. ii) Do your results support or contradict the historical record on the relationship between risk and return in the financial market in both Canada and the United States? iii) Which investment would you prefer? Explain your answer.