Question

Two years ago, Jack Quack bought 1000 shares of ZMQ stock at $1,000 per share. This...

Two years ago, Jack Quack bought 1000 shares of ZMQ stock at $1,000 per share. This morning when he checked he found that ZMQ stock was selling for $62.00 per share. Advise Jack on what he should do—dump his shares, hold, buy more, what??? (Notes: There have been no stock splits over the past two years. Also ignore tax considerations. And, if it matters, Jack is 15 years from retirement.)

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer)

Here I would recommend Jack Quack to hold those shares.

Here,if the share price falls continue after this then till he gain gain even if he sell if the price moves close to $50.Here, the buy more option is not recommended as too much investment in single company can make us lose.If Jack is willing to take risk then he can buy more shares.However, such risk is not recommended as it looks like his retirement investment. The share split will not be an problem as share split may decrease value of share price but not total value.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Not long ago, Jack Edwards bought 200 shares of Almost Anything Inc. at $45 per share;...
Not long ago, Jack Edwards bought 200 shares of Almost Anything Inc. at $45 per share; he bought the stock on margin of 60%. The stock is now trading at $60 per share, and the Federal Reserve has recently lowered initial margin requirements to 50%. Jack now wants to do a little pyrimiding and buy another 300 shares of the stock. What is the minimum amount of equity that he'll have to put up in this transaction?
Not long​ ago, Jack Edwards bought 300 shares of Almost Anything Inc. at $44.07 per​ share;...
Not long​ ago, Jack Edwards bought 300 shares of Almost Anything Inc. at $44.07 per​ share; he bought the stock on margin of 61%. The stock is now trading at $63.88 per​ share, and the Federal Reserve has recently lowered initial margin requirements to 53%. Jack now wants to do a little pyramiding and buy another 400 shares of the stock. What is the minimum amount of equity that​ he'll have to put up in this​ transaction?
John bought 1000 shares of Intel stock on October 18, 2014, for $30 per share plus...
John bought 1000 shares of Intel stock on October 18, 2014, for $30 per share plus a $750 commission he paid his broker. On December 12, 2018, he sells the shares for $42.50 per share. He also incurs a $1000 fee for this transaction. a.) What is John's adjusted basis in the 1000 shares of Intel stock? b.) What amount does John realize when he sells the 1000 shares? c.) What is the gain/loss for John on the sale of...
Exactly one year ago, Harv bought 500 shares of Primer Corp stock for $20.75 per share....
Exactly one year ago, Harv bought 500 shares of Primer Corp stock for $20.75 per share. He plans on selling all of the shares today at the current market price of $22.50 per share. Over the last year, Primer Corp. paid out dividends of $0.75 per share on its common stock. What is Harv’s holding period return for the year on Primer Corp. stock? Submit your answer as a percentage and round to two decimal places. Describe and interpret the...
Three years ago, you bought 700 shares of Kayleigh Milk Co. for $15 a share with...
Three years ago, you bought 700 shares of Kayleigh Milk Co. for $15 a share with a margin of 70 percent. Currently, the Kayleigh stock is selling for $20 a share. Assume there are no dividends and ignore commissions. Do not round intermediate calculations. Round your answers to two decimal places. Assuming that you pay cash for the stock, compute the annualized rate of return on this investment if you had paid cash.   % Assuming that you used the maximum...
Mr. Dow bought 100 shares of stock at $19 per share. Three years later, he sold...
Mr. Dow bought 100 shares of stock at $19 per share. Three years later, he sold the stock for $25 per share. What is his annual rate of return? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Rebecca holds 100 shares of Gotcha stock that she purchased for $1000 several years ago. In...
Rebecca holds 100 shares of Gotcha stock that she purchased for $1000 several years ago. In a merger of Gotchas into Solis, Inc, Rebecca exchanges her 100 Gotcha shares for 1000 Solis shares and $500. Gotcha is valued at $40 per share and Solis at $3.50 per share. A. What is Rececca's realized and recognized gain/loss from the reorganization? B. What is Rebecca's basis in her Solis stock?
A year​ ago, an investor bought 400 shares of a mutual fund at ​$8.51 per share....
A year​ ago, an investor bought 400 shares of a mutual fund at ​$8.51 per share. Over the past​ year, the fund has paid dividends of ​$0.83 per share and had a capital gains distribution of ​$0.69 per share. a. Find the​ investor's holding period​ return, given that this​ no-load fund now has a net asset value of ​$9.28. b. Find the holding period​ return, assuming all the dividends and capital gains distributions are reinvested into additional shares of the...
A couple of years ago, you bought 500 shares of the Los Pollos Hermnos stock that...
A couple of years ago, you bought 500 shares of the Los Pollos Hermnos stock that has a beta of 2.7 for a price of USD 8,000. You also bought 1,000 shares of the Doghouse Drive In (beta = 1.5) for USD 9,000 and 4,000 shares of Mesa Verde Bank (beta = 0.5) for USD 15,000. The market value per share of these stocks now are USD 20, USD 7, and USD 2, respectively. What is the current beta of...
A year​ ago, an investor bought 600 shares of a mutual fund at ​$8.56 per share....
A year​ ago, an investor bought 600 shares of a mutual fund at ​$8.56 per share. Over the past​ year, the fund has paid dividends of ​$0.89 per share and had a capital gains distribution of ​$0.65 per share. a. Find the​ investor's holding period​ return, given that this​ no-load fund now has a net asset value of ​$9.11. ( answer in % and 2 decimal places) b. Find the holding period​ return, assuming all the dividends and capital gains...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT