How far does price of telecom stock

Assignment Help Financial Management

Reference no: EM131547659

You are bullish on Telecom stock. The current market price is $30 per share, and you have $6,000 of your own to invest. You borrow an additional $6,000 from your broker at an interest rate of 7% per year and invest $12,000 in the stock.

a. What will be your rate of return if the price of Telecom stock goes up by 5% during the next year? The stock currently pays no dividends. (Negative value should be indicated by a minus sign. Round your answer to the nearest whole number. Omit the "%" sign in your response.)

b. How far does the price of Telecom stock have to fall for you to get a margin call if the maintenance margin is 30%? Assume the price fall happens immediately. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Reference no: EM131547659

Questions Cloud

Annual coupon rate bonds five years ago : Unicorp issued 8% annual coupon rate bonds five years ago. Interest is paid semi-annually. If the bond is bought at par value, what is its yield-to-maturity?

Calculate the book value of firm and book value per share : Calculate the book value of the firm. Calculate the book value per share.

What will happen with expected return : What is the expected value of the investment? What if the cashflow will be 72.5 and 142.5. What will happen with expected return? Explain.

The risks to both the plan sponsor and plan beneciaries : Discuss the risks to both the plan sponsor and plan beneciaries under the four types of pension plans.

How far does price of telecom stock : How far does the price of Telecom stock have to fall for you to get a margin call if the maintenance margin is 30%? Assume the price fall happens immediately.

Find their unpaid balance after one year : Find their unpaid balance after 1 year. During that first year, how much interest do they pay?

Individual major medical insurance policy with lifetime : Brittany, age 28, purchased an individual major medical insurance policy with a lifetime limit of $ 1 million, a calander year -deductible of $250,

How much gross fixed assets did abc buy or sell during year : Depreciation expenses during the year were 427,000. How much gross fixed assets did ABC buy or sell during the year?

What is the firm cash conversion cycle : Its average daily sales are 969,000 and its gross profit margin is 30 percent. What is the firm's cash conversion cycle?

User Account

All Pages