Question

In: Finance

Suppose you buy a round lot of Francesca Industries stock (100 shares) on 60 percent margin...

Suppose you buy a round lot of Francesca Industries stock (100 shares) on 60 percent margin when the stock is selling at $25 a share. The broker charges a 11 percent annual interest rate, and commissions are 2 percent of the stock value on the purchase and sale. A year later you receive a $0.75 per share dividend and sell the stock for $36 a share. What is your rate of return on Francesca Industries? Do not round intermediate calculations. Round your answer to two decimal places. %

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Suppose you buy a round lot of Francesca Industries stock (100 shares) on 60 percent margin...
Suppose you buy a round lot of Francesca Industries stock (100 shares) on 60 percent margin when the stock is selling at $35 a share. The broker charges a 14 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sale. A year later you receive a $0.50 per share dividend and sell the stock for $47 a share. What is your rate of return on Francesca Industries? Do not round intermediate calculations....
Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the...
Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is selling at R20 a share. The broker charges a 10 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sale. A year later you receive a R0.50 per share dividend and sell the stock for R27 a share. What is your rate of return on Francesca Industries?
Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the...
Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is selling at R20 a share. The broker charges a 10 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sale. A year later you receive a R0.50 per share dividend and sell the stock for R27 a share. What is your rate of return on Francesca Industries?
Suppose you buy 100 shares of stock XYZ at $10 a share with a margin of...
Suppose you buy 100 shares of stock XYZ at $10 a share with a margin of 50%. You also buy 200 shares of stock ABC at $50 a share with an 60% margin. You are very sure that, in six month, the price of the first stock would be $15 because you got insider information, but you are not so sure about the price of the second stock. Suppose you want to achieve a 20% return from your portfolio, then...
You buy 100 shares of stock at $20 per share on margin of 40 percent.  If the...
You buy 100 shares of stock at $20 per share on margin of 40 percent.  If the price of the stock rises to $40 per share, what is your percentage gain in equity?  Disregard interest costs. PLEASE TYPE OUT
Imagine buying 100 shares of a $25 stock on a 60-percent margin that pays an annual...
Imagine buying 100 shares of a $25 stock on a 60-percent margin that pays an annual dividend of $1 and selling them a year later at $30. If commssions are 2% per trade and interest on borrowing money is 4%, what is your rate of return?
On January 1, you sold short one round lot (that is, 100 shares) of Lowe's stock...
On January 1, you sold short one round lot (that is, 100 shares) of Lowe's stock at $22.50 per share. On March 1, a dividend of $1.40 per share was paid. On April 1, you covered the short sale by buying the stock at a price of $17.50 per share. You paid 55 cents per share in commissions for each transaction. a. What is the proceeds from the short sale (net of commission)? b. What is the dividend payment? c....
On January 1, you sold short one round lot (that is, 100 shares) of Lowe's stock...
On January 1, you sold short one round lot (that is, 100 shares) of Lowe's stock at $27.70 per share. On March 1, a dividend of $3.30 per share was paid. On April 1, you covered the short sale by buying the stock at a price of $22.00 per share. You paid 25 cents per share in commissions for each transaction. a. What is the proceeds from the short sale (net of commission)? b. What is the dividend payment? c....
If you buy 100 shares of a $50 stock on 40% margin, at what price would...
If you buy 100 shares of a $50 stock on 40% margin, at what price would your equity equal half of your market value?
You want to buy 50 shares of stock at $60 per share. You have a margin account.
  A. You want to buy 50 shares of stock at $60 per share. You have a margin account. The initial margin is 60% and the maintenance margin is 35%. Calculate the maximum amount of cash you may borrow to be able to make this purchase. B. You want to buy 50 shares of stock at $60 per share. You borrow $1,000 on margin. The initial margin is 60% and the maintenance margin is 35%. Calculate the price below which...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT