Bill Campbell invested $4,000 and borrowed $4,000 to purchase shares in Walmart. At the time of investment, Walmart stock was selling for $70 a share.
a. If Bill paid $30 commission, how many shares could Bill buy if he used only his own money and did not use margin?
b. If Bill paid $50 commission, how many shares could Bill buy if he used his $4,000 and borrowed $4,000 on margin to buy Wal-Mart stock?
c. Assuming that Bill did use margin, paid $90 commission to sell his stock, and sold his Wal-Mart stock for $77, how much profit did he make on his Wal-Mart investment?