c) Redo parts a) and b), but now assume that Xtel also has paid a year-end dividend

of $1 per share. The prices in part a) should be interpreted as exdividend, that is,

prices after the dividend has paid.

new a) if you earn no interest on the funds in your margin account, what will be your rate

of return after one year if Xtel stocks is selling at i), ii) and iii)

i) 44.00 $/share

ii)40.00 $/share

iii)36.00 $/share

Cash received in the short sell

Cash spent in

Profit

Rate of Return

new b) If the maintenance margin is 25%, how high can Xtels price rise before you get a

marging call?

Price

Margin