What stock price level would you get margin call

Assignment Help Financial Management

Reference no: EM131997871

1. You purchased 1000 shares of CSCO common stock on margin at $19 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.

a. $12.86

b. $15.75

c. $19.67

d. $13.57

2. U.S Treasury bills are paying about 0.2 percent, and the estimated market risk premium (based on large common stocks) is about 8 percent. Apple (AAPL) has an estimated beta of 1.44. Using the SML approach, what's the return on equity of Apple stock?

A. 11.72%

B. 11.32%

C. 11 %

D. 10.32 %

Reference no: EM131997871

Questions Cloud

What is the maximum share price that happy times : What is the maximum share price that Happy Times should be willing to pay for Joe’s?

What is the market price of this bond : A treasury bond is quoted at a price of 104.8640. What is the market price of this bond if the face value is $5000?

Pension plan is obligated to make disbursements : A pension plan is obligated to make disbursements of $2.4 million, $3.4 million, and $2.4 million at the end of each of the next three years, respectively.

What is the annual rate of return of your investment : What is the annual rate of return of your investment? What cash flows will you pay and receive from your investment in the bond per $ 100 face value?

What stock price level would you get margin call : Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call?

Discounted payback period of the proposed investment : Compute the? IRR, simple payback? period, and discounted payback period of the proposed investment.

What is maximum price you will pay for stock today : What is the maximum price you will pay for the stock today if you want to earn a return of 11%? (Round your answer to 2 decimal places.)

Explain the current stock price and rationalize : Explain the current stock price and rationalize why it hasn't decreased significantly?

Compute duration and convexity for the bond : What is the yield-implied price for the bond? Compute duration and convexity for the bond. What do you conclude about the accuracy of the two rules?

User Account

All Pages