Question

Jason bought 100 shares of ABC Co. stock for $58.00 per share on 65% margin. The...

Jason bought 100 shares of ABC Co. stock for $58.00 per share on 65% margin. The maintenance margin is 30%. Assume he holds the stock for three months and that his interest costs will be 9% per year over the holding period. He gets a dividend payments of $0.75 per shares during this three months period. What is his approximate percentage return on invested capital if the stock price went up by 5%?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
14- Jeff bought 100 shares of stock for $30.00 per share on 70% margin. Assume Jeff...
14- Jeff bought 100 shares of stock for $30.00 per share on 70% margin. Assume Jeff holds the stock for one year and that his interest costs will be $45 over the holding period. Jeff also received dividends amounting to $0.30 per share. Ignoring commissions, what is his percentage return on invested capital if he sells the stock for $34 a share?
Hiral bought 10,000 shares of LuLu at $40 per share, with an initial margin of 60%....
Hiral bought 10,000 shares of LuLu at $40 per share, with an initial margin of 60%. He was charged 12% margin interest annually. Two years later he sold the stock for $80 per share. LuLu declared and paid a special dividend of $4 per share during the period Hiral held the stock. What was Hiral's holding period return? 100% 150% 167% 183%
An investor purchased 400 shares of a company at $30 per share. The stock was bought...
An investor purchased 400 shares of a company at $30 per share. The stock was bought on 65 percent margin (35 percent of the purchase amount was borrowed). One month later, the investor had to pay interest on the amount borrowed at a rate of 3 percent per month. At that time, the investor received a dividend of $0.50 per share. Immediately after receiving the dividend, he sold the shares at $35 per share. The investor paid total commissions of...
An investor purchased 400 shares of a company at $30 per share. The stock was bought...
An investor purchased 400 shares of a company at $30 per share. The stock was bought on 65 percent margin (35 percent of the purchase amount was borrowed). One month later, the investor had to pay interest on the amount borrowed at a rate of 3 percent per month. At that time, the investor received a dividend of $0.50 per share. Immediately after receiving the dividend, he sold the shares at $35 per share. The investor paid total commissions of...
You bought 400 shares of Brooklyn Trading Co. on margin at $55 per share yesterday. Initial...
You bought 400 shares of Brooklyn Trading Co. on margin at $55 per share yesterday. Initial margin and maintenance margin are 35% and 45% respectively. The stock price per share goes down to $52 today. What is the equity value today on your margin account and what is the margin percent as of today?   6,500, 31.3% 14,300, 51.3% 19,750, 51.3% 7,700, 31.3%
1. Louis purchased 300 shares of stock on margin for $22.15 a share and sold the...
1. Louis purchased 300 shares of stock on margin for $22.15 a share and sold the shares eleven months later for $24.50 a share. The initial margin requirement was 75 percent and the maintenance margin was 30 percent. The interest rate on the margin loan was 8.5 percent. He received no dividend income. What was his holding period return? Multiple Choice 8.45 percent 9.88 percent 10.76 percent 7.05 percent 11.56 percent 2.   You purchased six put option contracts with a...
2. An investor purchases 500 shares of ABC stock on margin. The current price of ABC...
2. An investor purchases 500 shares of ABC stock on margin. The current price of ABC stock is $75 per share, the initial margin requirement is 60% and the maintenance margin requirement is 35%. A)   What is the dollar amount of the loan the investor receives from her broker for this margin purchase? B)    How far can the stock price fall before the investor gets a margin call?
An investor purchased 300 shares of a company at $25 per share. The stock was bought...
An investor purchased 300 shares of a company at $25 per share. The stock was bought on 70 percent margin (30 percent of the purchase amount was borrowed). One month later, the investor had to pay interest on the amount borrowed at a rate of 3 percent per month. At that time, the investor received a dividend of $0.6 per share. Immediately after receiving the dividend, he sold the shares at $38 per share. The investor paid total commissions of...
You purchased 100 shares of common stock on margin at $40 per share. Assume the initial...
You purchased 100 shares of common stock on margin at $40 per share. Assume the initial margin is 50% and the stock pays no dividend. What would the maintenance margin be of a margin call is made at a stock price of $25? Ignore interest on margin. Make sure that you interpret your numerical answer (i.e. explain why would you get the call at this rate).
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT