USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) 1 to 3. Jackie has a margin account with a balance of $150,000. If the initial margin deposit is 60 percent and Turtle Industries is currently selling at $50 per share: 1. How many shares of Turtle can Jackie purchase? 2. What is Jackie's profit/loss if Turtle's price after one year is $40? 3. If the maintenance margin is 25 percent, to what price can Turtle Industries fall before Jackie receives a margin call? USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) 4 to 6. Heidi Talbott has a margin account with a balance of $50,000. If the initial margin deposit is 50 percent, and RC Industries is currently selling at $50 per share: 4. How many shares of RC can Heidi buy? 5. What is Heidi's profit if RC's price rises to $80? 6. If the maintenance margin is 25 percent, to what price can RC Industries stock price fall before Heidi receives a margin call? USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) 7 to 9. Kathy Smith has a margin account with a balance of $60,000. If initial margin requirements are 80 percent, and Jackson Industries is currently selling at $40 per share: 7. How many shares of Jackson can Kathy buy? 8. What is Kathy's profit if Jackson's price rises to $50? 9. If the maintenance margin is 25 percent, to what price can Jackson Industries fall before Kathy receives a margin call? USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) 10 and 11 You decide to sell 100 shares of Davis Industries short when it is selling at its yearly high of $35. Your broker tells you that your margin requirement is 55 percent and that the commission on the sale is $15. While you are short, Davis pays a $0.75 per share dividend. At the end of one year you buy your Davis shares (cover your short sale) at $30 and are charged a commission of $15 and a 6 percent interest rate. 10. What is your dollar return on the investment? 11. What is your rate of return on the investment? USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) 12 and 13. You decide to sell 100 shares of Topgun Enterprises Inc. short when it is selling at its yearly high of $42.25. Your broker tells you that your margin requirement is 60 percent and that the commission on the sale is $20. While you are short, Topgun pays a $0.85 per share dividend. At the end of one year you buy your Topgun shares (cover your short sale) at $44 and are charged a commission of $20 and a 5 percent interest rate. 12. What is your dollar return on the investment? 13. What is your rate of return on the investment? PROBLEMS 14 TO 16 ARE INDEPENDENT OF ONE ANOTHER 14. Suppose you buy a round lot of DG Solutions stock on 60% margin when it is selling at $55 a share. The broker charges a 10 percent annual interest rate and commissions are 3 percent of the total stock value on both the purchase and the sale. If at year end you receive a $1.10 per share dividend and sell the stock for 55 5/8, what is your rate of return on the investment? 15. Suppose you buy a round lot of HS Inc. stock on 55% margin when it is selling at $40 a share. The broker charges a 10 percent annual interest rate and commissions are 4 percent of the total stock value on both the purchase and the sale. If at year end you receive a $0.90 per share dividend and sell the stock for 35 5/8, what is your rate of return on the investment? 16. Suppose you buy a round lot of Altman Industries stock on 50% margin when it is selling at $35 a share. The broker charges a 10 percent annual interest rate and commissions are 5 percent of the total stock value on both the purchase and the sale. If at year end you receive a $1.00 per share dividend and sell the stock for $42.63, what is your rate of return on the investment? USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) 17 and 18. You decide to sell short 200 shares of XCorp stock at a price of $75. Your margin deposit is 65 percent. Commission on the sale is 1.25%. While you are short, the stock pays a $1.75 per share dividend. Interest on margin debt is 5.25% per year. 17. At the end of one year you close out your short position by purchasing share of XCorp at $45 per share. The commission is 1.25%. What is your rate of return on the investment? 18. Suppose at the end of one year XCorp is selling at $90 per share and you cover your short position at this price. What is your rate of return on the investment? (Assume a 1.25% commission on the purchase.) USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) 19 to 23 Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2% for purchases and 2% for sales. The interest rate on margin debt is 6.25% per year. The maintenance margin is 30%. 19. At the end of one year shares of RossCorp stock are selling for $55 per share and the company paid dividends of $0.85 per share. Assuming that you paid the full cost of the purchase, what is your rate of return if you sell RossCorp stock? 20. At the end of one year shares of RossCorp stock are selling for $35 per share and the company paid dividends of $0.85 per share. Assuming that you paid the full cost of the purchase, what is your rate of return if you sell RossCorp stock? 21. At the end of one year shares of RossCorp stock are selling for $55 per share and the company paid dividends of $0.85 per share. Assuming that you borrowed 25% of cost of the purchase, what is your rate of return? 22. At the end of one year shares of RossCorp stock are selling for $35 per share and the company paid dividends of $0.85 per share. Assuming that you borrowed 25% of cost of the purchase, what is your rate of return? 23. Assume that you purchase 150 shares of RossCorp stock at $45 each by making a margin deposit of 55%. At what price would you receive a margin call?