Question
Background Information: Suppose that ZX Inc. is currently selling at $50 per share. You buy 200 shares, using $5,000 of your own money and borrowing
Background Information: Suppose that ZX Inc. is currently selling at $50 per share. You buy 200 shares, using $5,000 of your own money and borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 5%.
f Suppose that you sell short 400 shares of ZX Inc., currently selling for $50 per share, what will your rate of return be after one year if ZX Inc. stock is selling at $54? Assume that ZX Inc. pays no dividends (use whole number percentage with two decimals rounded up/down - i.e. 0.3245 input 32.45) .
g Suppose that you sell short 400 shares of ZX Inc., currently selling for $50 per share, what will your rate of return be after one year if ZX Inc. stock is selling at $50? Assume that ZX Inc. pays no dividends (use whole number percentage with two decimals rounded up/down - i.e. 0.3245 input 32.45).
h Suppose that you sell short 400 shares of ZX Inc., currently selling for $50 per share, what will your rate of return be after one year if ZX Inc. stock is selling at $46? Assume that ZX Inc. pays no dividends (use whole number percentage with two decimals rounded up/down - i.e. 0.3245 input 32.45).
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Financial Reporting Financial Statement Analysis And Valuation
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
10th Edition
0357722094, 978-0357722091
