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Suppose that XTel currently is selling at $ 3 0 per share. You buy 6 0 0 shares using $ 1 2 , 6 0
Suppose that XTel currently is selling at $ per share. You buy shares using $ of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is
Required:
a What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to i $; ii $; ii $Leave no cells blank be certain to enter wherever required. Negative values should be indicated by a minus sign. Round your answers to decimal places.
b If the maintenance margin is how low can XTels price fall before you get a margin call? Round your answer to decimal places.
c How would your answer to requirement b would change if you had financed the initial purchase with only $ of your own money? Round your answer to decimal places.
d What is the rate of return on your margined position assuming again that you invest $ of your own money if XTel is selling after one year at i $; ii $; iii $Negative values should be indicated by a minus sign. Round your answers to decimal places.
e Continue to assume that a year has passed. How low can XTels price fall before you get a margin call? Note: Assume maintenance margin of Round your answer to decimal places.
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