You have $14,000 to invest. The market price of Hitech Inc. stock is $20 per share and the margin requirement is 35 percent.

Required (show all calculations):

How many shares of Hitech Inc. could you purchase on margin?

Part b) 4 marks

Ming purchased 1,000 shares of ABC Inc. for $10 per share using $5,000 of her own cash along with a $5,000 loan. At the end of four years she sold the shares for $15 per share and had fully repaid the loan. Over her four- year holding period Ming earned dividends totaling $1.50 per share and she paid total interest of $400.00 on the loan. (Disregard commissions.)

Required (show all calculations):

1. Compute the taxable capital gain on sale of the shares.
2. Compute Mings net return on her investment (in percentage terms) over her four-year holding period (ignore taxes).