Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2: You want to purchase Disney shares at the current trading price of $125 per share You have $20,000 to invest and the initial

image text in transcribed
image text in transcribed
Question 2: You want to purchase Disney shares at the current trading price of $125 per share You have $20,000 to invest and the initial margin requirement is SOXYou want to make as much investments as possible in Disney stocles. The maintenance margin is 3%. The foarte is at 2x per year. Equity funds at beginning 20.000 Initial purchasing price per share (PO) $ 125.00 Initial margin- 50% New stock price per share (P1) - 100.00 Loan rate per year 2% a. Disney share price fails to $100 per share in one year, how much is the percentage margin? (5 points) AL PO = $125 Maximum investment in the stocks including using your equity 2 Number of shares purchased 2 2 ? AIP 100 Man value of stock owestment value by end of year one ? Equity value at new price ? Percentage margin 2 1 1. How much is your rate of the return on this investment over the year? (2 points) Rate of return T 2 Copy B I Condo format Cell int Delete Format Format Formale Styles Clear x x . Question 11 ABC, Inc., as just seld 200,000 shares in an etering the underwear's fee were 100,000. The offering for the shares were $50, but immediately upon issue the share price Jumpted to $55. Shares sold 200.000 Underwriter fees 100.000 Offering price 50.00 Post Issue price 55.00 What is your state of the total cost to ADC of the points) Explicit costs ? Implicit costs 2 Total cos 2

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Managerial Finance

Authors: Lawrence J Gitman, Chad J Zutter

7th Edition

0133546403, 9780133546408

More Books

Students also viewed these Finance questions

Question

=+What is the EVPI?

Answered: 1 week ago