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Suppose that XTel currently is selling at $50 per share. You buy 500 shares using $17,500 of your own money, borrowing the remainder of the
Suppose that XTel currently is selling at $50 per share. You buy 500 shares using $17,500 of your own money, borrowing the remainder of the purchase prtce from your broker. The rate on the margin loan is 8%. a. What is the percentage Increase in the net worth of your brokerage account if the price of XTel immediately changes to (a) $56. (b) $50, (c) $44? (Leave no cells blank - be certain to enter "O" wherever requlred. Negative values should be Indicated by a minus sign. Round your answers to 2 decimal places.) aPercentage gain DPeroentage gain Percentage gain b. If the maintenance margin is 30%, how low can XTel's price fall before you get a margin call? (Round your answer to 2 decimal places.) Price C. How would your answer to requirement 2 would change if you had financed the Intial purchase with only $12.500 of your own money (Round your answer to 2 decimel places.)
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