Question
Zeina is bullish on COMI stock (CIB) that paid annual dividends of 1 EGP per share. The current market price is EGP 65 per share,
Zeina is bullish on COMI stock (CIB) that paid annual dividends of 1 EGP per share. The current market price is EGP 65 per share, and she has EGP 10,075 to invest. She borrowed an additional EGP 10,075 from her broker at call money rate of 10% per year. Zeina is paying to her broker commission per share 0.5 EGP.
a) What will be Zeinas rate of return if the price of CIB stock goes up by 10% during the next year?
b) . How far does the price of CIB stock have to fall for Zeina to get a margin call if the maintenance margin is 30%? Assume the price fall happens immediately.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started