10. IPO Costs. Having heard about IPO underpricing, I put in an order to my broker for 1,000 shares of every IP0 he can get for me. After 3 months, my investment record is as follows: (LO15-2) Shares Allocated to Me Price per Share Initial Return IPO A 500 $10 7% 200 20 12 1,000 8 -2 D 12 23 a. What is the average underpricing in dollars of this sample of IPOS? b. What is the average initial return on my "portfolio" of shares purchased from the four IPOS that I bid on? When calculating this average initial return, remember to weight by the amount of money invested in each issue. c. "You have just encountered the problem of the winners' curse." True or false?

10. IPO Costs. Having heard about IPO underpricing, I put in an order to my broker for 1,000 shares of every IP0 he can get for me. After 3 months, my investment record is as follows: (LO15-2) Shares Allocated to Me Price per Share Initial Return IPO A 500 $10 7% 200 20 12 1,000 8 -2 D 12 23 a. What is the average underpricing in dollars of this sample of IPOS? b. What is the average initial return on my "portfolio" of shares purchased from the four IPOS that I bid on? When calculating this average initial return, remember to weight by the amount of money invested in each issue. c. "You have just encountered the problem of the winners' curse." True or false?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A customer bought 500 Boeing shares at $30 a piece with 50% initial margin and 35% maintenance margin. The stock price declined to $14. What is the actual margin now? If he receives a margin call, how much money the customer would’ve needed to deposit to avoid forced sell? Answer step by step. Do all calculation. Answer must be correct. Use word file for answer
35. Edwin, an investor, identifies an arbitraging opportunity on the shares of Tristan Group [buying in market A and selling in market B] and he can afford to trade 1,000 shares. The price levels and the transaction costs are as follows: Market A $35.00 per share Market B $35.50 per share Commission charges + Other Costs $25.00 per batch of 100 shares Based solely on the information given, which of the following observations is most likely true of the market? a. The market is highly inefficient because the investor can earn $500 by arbitraging. b. The market is inefficient because the investor can earn a profit by arbitraging. c. The market is efficient within the bounds of arbitrage as the investor can earn only $250 by arbitraging. d. It cannot be determined from the data given whether the market is efficient or inefficient. e. The market is efficient because the investor cannot earn a profit by arbitraging.
Answer the following problems with a complete solution. a. Find the 5% commission on the total sales of P20,000.00 b. You bought 20 shares at P750.00 per share. The broker charged her a P150.00 commission. Find the cost of the stock.c. You own 105 shares, par value P200.00. If the corporation declares an 8% dividend, what is the total dividend that should get? d. You bought ten P750.00 bonds at 315 plus a 6% brokerage fee. Find the investment.
You just purchased a share of stock in ABC Corporation, at a cost of $1,400. Your broker has indicated that there’s a 25% probability that the stock will end the year at a price of $1,000, a 60% probability that it will end at $2,000 is .60, and a 15% probability that it will end at $5,000. Calculate the mean, variance, and standard deviation for theinvestment’s end-of-year anticipated dollar value. In your view, is this a wise investment? Why or why not?
Jiffy Wax Corp. can sell common stock for $ 15 per share and its investors require a 14% return. However, the administrative or flotation costs associated with selling the stock amount to $ 2.40 per share. What is the cost of capital for Jiffy Wax if the corporation raises money by selling common stock? Select one: a. 14.00% b. 21.50% C 30.00% d. 16.67%
10. IPO Costs. Having heard about IPO underpricing, I put in an order to my broker for 1,000 shares of every IPO he can get for me. After 3 months, my investment record is as follows: (LO15-2) IPO BUD Shares Allocated to Me 500 200 1,000 0 Price per Share $10 20 8 12 Initial Return 7% 12 -2 23 a. What is the average underpricing in dollars of this sample of IPOs? b. What is the average initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating this average initial return, remember to weight by the amount of money invested in each issue. c. "You have just encountered the problem of the winners' curse." True or false?
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Please answer is 24840, only post if your answer comes this with explanation and concept. Thabks!
Having heard about IPO underpricing, I put in an order to my broker for 1, 120 shares of every IPO he can get for me. After 3 months, my investment record is as follows: IPO Shares Allocated to Me Price per Share Initial Return A 620 $ 10 6 % В 320 20 14 C 1, 1208-3D0 12 23 a. What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the average initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating this average initial return, remember to weight by the amount of money invested in each issue.
25. Assume you purchased 2000 shares of XYZ common stock on margin at $30 per share from your broker. If the initial margin is 70%, what is the interest payment on the amount you borrowed from the broker if interest rate is 9%? $18000 $1620 $42000 $3780
Our company, which was founded 10 years ago, has allocated 10,000 shares to investors at 1 TL nominal price. Today, earning per share of our company is 60 kuruş and the company has announced that payout ratio is 40%. If the expected return on equity is 24%, a What is the current price of one share today? b. What would be the price of one share 5 years later (Ps)? c. What would be the total market value of the equity 5 years later?
To help them estimate the company's cost of capital, Smithco has hired you as a consultant. You have been provided with the following data about the company's stock: D1 $1.45; PO = $25; and g = 6.50% (constant). What is the cost of common from issuing new stock, assuming the flotation cost is 10% of the stock price? = 13.59% 11.10% 12.94% 11.68% 12.30%

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