Question
You are considering the purchase of a stock with the following characteristics: the current price is $48, and you expect three annual dividends of $2.40,
You are considering the purchase of a stock with the following characteristics: the current price is $48, and you expect three annual dividends of $2.40, $2.60, $2.80, and at the end of three years you anticipate the stock will sell for $63.
What is the AYTM of the stock?
2. Builtrite stock is currently selling for $43 a share. You purchase 100 shares and later the stock is selling for $46 a share. Without using margin what is your roi?
3. Builtrite stock is currently selling for $47 a share. You purchase 100 shares and later the the stock is selling for $49 a share. Using 60% margin. What is your approximate ROI?
4. Builtrite stock is currently selling for $40 a share. You purchase 100 shares using 60% margin and later the stock is selling for $33 a share. What stock price would trigger a margin call ( using 25%)?
5. Using 60% margin, you decide to sell 100 shares of Builtrite short at a current price of $32 a share. Later, Builtrite is selling for $28 a share. What is your ROI?
Step by Step Solution
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Step: 1
1 To calculate the Average Yield to Maturity AYTM of the stock we need to find the average annual dividend and the expected capital gain over the inve...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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