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 $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. Round your answer to two decimal places.
Solutions
jeff jeffy answered 2 years agoRelated 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 $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....
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...
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....
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...
1) Assume you buy 100 shares of stock at $40 per share on margin. The initial...
1) Assume you buy 100 shares of stock at $40 per share on
margin. The initial margin is 50%. If the price rises to $55 per
share, what is your percentage gain on the initial equity?
You decide to buy 100 shares of Chevron (CVX) in a margin account that has an...
You decide to buy 100 shares of Chevron (CVX) in a margin
account that has an initial margin of 50%. CVX pays an annual
dividend of $4 a share and the stock is currently trading at $100.
The cost of borrowing from your broker is 6%. What is your % return
if the stock increases to $125 in 1 year? If the next day after you
purchase the stock bad news comes out and drops the stock to $90.
Will...
Part 1: On January 1, you sold short one round lot (that is, 100 shares) of...
Part 1:
On January 1, you sold short one round lot (that is, 100 shares)
of Lowe's stock at $29.00 per share. On March 1, a dividend of
$2.10 per share was paid. On April 1, you covered the short sale by
buying the stock at a price of $24.50 per share. You paid 50 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...
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