How far does the price of telecom stock have to fall

Assignment Help Finance Basics

Reference no: EM131951184

Question: 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 "tiny_mce_markerquot; sign in your response.)

Reference no: EM131951184

Questions Cloud

Write a program that inputs the number of dollars : Write a program that inputs the number of dollars and outputs how many chocolate bars you can collect after spending your money and redeeming as many coupons.

Write a short essay expressing your views on the issue : Use the readings from the course to write a short (750-800 words) essay expressing your views on the issue. Keep it tight and focused.

Estimate the price adjusted for inflation : Your program should then convert the percentage to a fraction, such as 0.056, and should use a loop to estimate the price adjusted for inflation.

Job burnout-job satisfaction-retention and turnover : What is the relationship between job burnout, job satisfaction, retention and turnover? As a manager, what kinds of things would you institute.

How far does the price of telecom stock have to fall : 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.

Responsibilities does the manager have to terry and phil : What legal, ethical, and economic responsibilities does the manager have to Terry and Phil?

Prepare a financial report for Pepsico Inc firm : This assignment asks you to prepare a financial report for a real U.S. firm using data from Yahoo! The firm's name is 'Pepsico Inc.

Determine the retail method of inventory costing : A business using the retail method of inventory costing determines that merchandise inventory at retail is $1, 235,000.

How can you explain one journal article : How can you explain one journal article/ newspaper article/report/ statistical report/news/internet clippingsby using/applying concepts/theories.

User Account

All Pages