Gordon Gekko purchased 21m shares of BlueStar (BST) through share & option transactions facilitated by Jackson & Steinham at an average price of $24.25 per share.

His broker Bud Fox 'hangs him out in the wind to twist' by selling BST to Sir Larry Wildman for only $16.40 a share!

If Gekko & Co. paid only 45% of the initial purchase price in cash, and borrowed the rest on margin(ignoring 2% principal leverage fees & 0.25% trading fees otherwise paid to Jackson & Steinham), what % of Gekko's initial capital has been wiped out?

How much lower is his holding period return (HPR) using leverage, versus paying for BST in cash?

A.Capital wiped out: 71.02%; HPR -39.56%

B.Capital wiped out: 71.02%; HPR -31.96%

C.Capital wiped out: 75.69%; HPR -39.06%

D.Capital wiped out: 71.94%; HPR -39.56%

E.Capital wiped out: 75.69%; HPR -31.96%

F.Capital wiped out: 71.94%; HPR -39.06%