Question
Assume you are given the following information for firms A and B: A B D $54,000.00 $46,000.00 E $39,500.00 $47,500.00 Price $25.00 $25.00 i 12.00%
Assume you are given the following information for firms A and B:
| A | B | |
| D | $54,000.00 | $46,000.00 |
| E | $39,500.00 | $47,500.00 |
| Price | $25.00 | $25.00 |
| i | 12.00% | 12.00% |
| EBIT | $157,350.00 | $93,000.00 |
| No taxes |
How do you replicate an investment in 40% of stock B by using stock A?
A) Buy 760 shares of stock B and lend $3,200.
B) Buy 40% of stock B and borrow $3,3200.
C) Buy 632 shares of stock A and lend $3,200.
D) Buy 40% of stock A and borrow $3,200.
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Affordable Housing Finance
Authors: K. Hawtrey
2009th Edition
0230555187, 978-0230555181
