10) Assume that MM's perfect capital markets conditions are met and that you can borrow

and lend at the same 5% rate as With. You have $5,000 of your own money to invest and

you plan on buying Without stock. Using homemade leverage, how much do you need to

borrow in your margin account so that the payoff of your margined purchase of Without

stock will be the same as a $5,000 investment in With stock?

I dont understand the explanation that is on the document could you explain me?