Kindly help me with this question general Accounting An investor purchases 100 shares of XYZ Corporation at$45 per share with a margin requirement of 60%. Thestock price rises to $58 per share after one year.Calculate the percentage rate of return, ignoringcommissions and other expenses.

Step 1: Define Percentage Rate of ReturnPercentage Rate of Return measures the profit earned on an…

Answered: An investor purchases 100 shares of XYZ…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 8P

See similar textbooks

Similar questions

A speculator sells a stock short for $71 a share. The company pays a $2.50 annual cash dividend.After a year has passed, the seller covers the short position at $63. If the margin requirement is55 percent, what is the percentage return earned on the investment? Redo the calculations, assuming the price of the stock is $78 when the investor closes theposition. Based on your calculations to both scenarios, what generalization can be inferred?
Please explain the solution to this General accounting problem with accurate principles.
Suppose you purchase one share of the stock of Cereal Correlation Company at the beginning of year 1 for $35. At the end of year 1, you receive a $3 dividend, and buy one more share for $44. At the end of year 2, you receive total dividends of $6 (i.e., $3 for each share), and sell the shares for $50 each. The time-weighted return on your investment is? When performing the calculations, do not round any inputs or interim results until you get the final answer. Round your final answer to four places after the decimal point. The dollar-weighted return on your investment is? When performing the calculations, do not round any inputs or interim results until you get the final answer. Round your final answer to four places after the decimal point.
An investor buys 300 shares of stock selling at $76 per share using a margin of 59%. The stock pays annual dividends of $3.00 per share. A margin loan can be obtained at an annual interest cost of 9.6%. Determine what return on invested capital the investor will realize if the price of the stock increases to $115 within six months. What is the annualized rate of return on this transaction?
Suppose you purchase one share of the stock of Red Devil Corporation at the beginning of year 1 for $43.00 At the end of year 1, you receive a dividend of $2, and buy one more share for $47.00. At the end of year 2, you receive total dividends of $4 (e., $2 for each share), and sell the shares for $55.00 each. What is the time-weighted return on your investment? (Round your answer to 2 decimal places. Do not round intermediate calculations.) Return 1%
An investor buys 200 shares of stock selling at $71 per share using a margin of 70%. The stock pays annual dividends of $1.00 per share. A margin loan can be obtained at an annual interest cost of 6.1%. Determine what return on invested capital the investor will realize if the price of the stock increases to $85 within six months. What is the annualized rate of return on thistransaction? If the price of the stock increases to $85 within six months, the six-month return on this transaction is _____%
You purchase 800 shares of CUW at $71.51 using your full margin which as an initial margin of 70% (or 0.70). The maintenance margin is 45% (or 0.45). At what price will you get your margin call?" (Neglect any interest on the cash loan)
Suppose you purchase one share of the stock of Red Devil Corporation at the beginning of year 1 for $46.50. At the end of year 1, you receive a dividend of $2, and buy one more share for $50.50. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share), and sell the shares for $58.50 each. What is the time-weighted return on your investment? (Round your answer to 2 decimal places. Do not round intermediate calculations.)
You purchase 1,000 shares of WMT (Walmart) for $143 per share. A year later, you sell the stock for $166 per share. You receive a dividend of $2.27 a share. a.What is your total dollar return? b. What are your dividend yield, capital gain yield, and total percentage return? Note: don't use chat gpt.
In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. What is your total return on this trade in dollar amount?
You purchase 200 shares for $50 a share, and after a year the price rises to $70. What is yourpercentage return if you bought the stock on the following margin:a. 50% (ignore commissions, dividends, and interest expense) b. 30% (ignore commissions, dividends, and interest expense) c. 20% (and the borrowing cost was 10% of initial purchase).
You purchase 100 shares of COST (Costco) for $280 per share. Three months later, you sell the stock for $290 per share. You receive a dividend of $0.57 a share. What is your total dollar return?

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS

An investor purchases 100 shares of XYZ Corporation at $45 per share with a margin requirement of 60%. The stock price rises to $58 per share after one year. Calculate the percentage rate of return, ignoring commissions and other expenses.