Assets Value of Stocks $ Liabilities and Shareholders' Equity 8,000.00 6,750.00 14,750.00 Loan from Broker $ $ Equity Suppose the maintenance margin is 34%. How far could the stock price fall before the investor would get a margin call? Assume that the stock is initially priced at $25 per share.

Q: The stock of Business Adventures sells for $55 a share. Its likely dividend payout and end-of-year…

A: Stock price$55.00DividendStock priceBoom$2.10$65.00Normal…

Q: Suppose a stock had an initial price of $57 per share, paid a dividend of $1.00 per share during the…

A: To calculate the percentage return we will use the below formula   Percentage return =…

Q: The margin requirements are: Initial 50/Maintenance 40. Ignore interest. ABC shares trade at $60.…

A: In trading broker gives margin to client for trading but there are cost to clients,  but trading on…

Q: A stock is currently selling for $80, pays a dividend of $3.00. Dividends are expected to grow at a…

A: given data stock price (P) = $80 dividend (D) = $3 growth rate (g) = 2% required rate of return (k)…

Q: 19) If returns of S&P 500 stocks are normally distributed, what range of returns would you expect to…

A: Solution: To find the 95% confidence interval, use the following formula Average + (2 * standard…

Q: 8. Dividend discount model Company X is expected to pay an end-of-year dividend of $5 a share. After…

A: End of year stock price (P1) = $110Expected end of year Dividend (D1) = $5Market Capitalization rate…

Q: on the above information,i. What is the current price of the stock?ii. What is the present value of…

A: Risk free rate = 2% Market risk premium = 5%Beta = 1.5Cost of equity= Risk free rate + (Beta*Market…

Q: Compute the value of preferred stock with an annual dividend of U dollars per share if the required…

A: Annual dividend = U = $44 Required rate of return = r = 3.84% + 0.40% = 4.24%

Q: A share of preferred stock pays a dividend of $0.33 annually. The required rate of return is 3%.…

A: Preferred stock is those shares that get the dividend before paying any dividend to common…

Q: Consider two stocks: Stocks Current Price Possible Prices after one year Stock ABC $12.00 ABC + =…

A: To mitigate the risk that arises due to market fluctuations, investors enter into forwards and…

Q: An investor is bullish in XYZ stock. He decides to buy on margin 1,000 shares at market price of…

A: Initial price=$50Maintenance margin=30%Initial margin=60%What should be margin call price.

Q: What is the value as common stock of a convertible preferred if it may be converted into 2.6 shares…

A: The convertible shares are generally those shares which would be converted into equity shares of the…

Q: You expect a stock to pay dividends of $0.80, $1.20, $1.85, $2.00 over the next 4 years. You will…

A: The price of a stock is the sum of the present value of future dividends.

Q: 7. What is the price of a stock today (Po) with dividends of: D,- $0.90, D-$1.50, D2₂ $2.50. D,…

A: Dividend in year 1 = d1  = $1.50 Dividend in year 2 = d2  = $2.50 Dividend in year 3 = d3  = $3.25…

Q: A single share of stock in a company has a current price of 65. The stock does not pay dividends.…

A: The stock's annual volatility will be the standard deviation in the return of the stock based on the…

Q: 4. Expected dividends as a basis for stock values The following graph shows the value of a stock's…

A: The Dividend Discount Model (DDM) assesses a stock's value by considering the current worth of its…

Q: A stock is expected to pay $0.80 per share every year indefinitely. If the current price of the…

A: Dividend per share (D) = $0.80 Equity cost of capital (e) = 0.064 Price per share after 5 years = ?…

Q: Suppose the stock of Company J pays no dividends and has a current price of $90.00. The forward…

A: Profit = Forward price - Stock price at expiry.Forward price = $93.60Stock price at expiry = 109.80

Q: PREFERRED STOCK VALUATION Earley Corporation issued perpetual preferred stock with an 8% annual…

A: Stock's value = Dividend  / Stock's yield

Q: h list point(s) possible K You are interested in purchasing a common company's stock. The stock is…

A: Current price of stock is the price which can be paid for purchase of the stock. It is also called…

Q: A stock price is $85.00. Assume r = 0.07 and there is no dividend. What is the 6-month forward…

A: Forward contracts are used for the purpose of hedging or speculation and involve the purchase or…

Q: Suppose a stock had an initial price of $74 per share, paid a dividend of $1.65 per share during the…

A: Initial Price (P0) = $74Dividend (D) = $1.65Final Price (P1) = $61

Q: WHAT IS THE VALUE OF THE COMMON STOCKS? IF THE COMMON STOCK HAS AN ANNUAL DIVIDEND OF $200 PER…

A: Value of the common stock can be calculated using Gordon growth model.   Value of common stock =…

Q: What is the holding- period return for a share which cost £4.50, was held for a year and then sold…

A: Holding Period Return: Holding period is used to determine how much gains or losses were incurred by…

Q: Assume ZYX preferred stock pays an annual dividend of $2.75. If its currently trading at $60 per…

A: First we need to calculate stock price by using this equation  Stock price = Dividend/capitalization…

Q: Please use BA Calculatior A stock just paid a dividend of $2.97. The dividend is expected to grow at…

A: Current Dividend = d0 = $2.97Growth Rate for Next 2 Years = g2 = 24.60%Growth Rate after year 2 = g…

Q: A stock that just paid a $6.95 annual dividend and will maintain a 7.5% dividend growth forever. If…

A: To calculate the required rate of return on a stock, we can use the Gordon Growth Model. The Gordon…

Q: II. Analyze the given table and answer the following questions. weeks HI LO STOCK DIV VOL(100s)…

A: Stocks are the capital that a company gets by the issue of shares.

Q: Assuming you have a margin account verage you wish to sell short a stock currently priced at $25 per…

A: Given that             Leverage  Ratio =1.76           Stock Price =$ 25 per share           Equity…

Q: Assume S = $33.00, σ = 0.32, r = 0.06, div = 0.01. You short 100 $35 strike calls at 68 days until…

A: A delta hedge position is a strategy used by investors to manage risk in options trading. It…

Q: A share of stock with a bela of 0.8 oumenity sells for $50 investors expect the stock to pay a year…

A: Expected Return = Risk free rate + Market risk premium * Beta

Q: The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to…

A: Data given: S0=$30  u=$36/$30 = 1.2 d=$26 /$30=0.866667 R=Risk free rate=0%   Required: Risk neutral…

Q: ing for $30.00 a share. What is the gain or loss on the following transactions? Use a minus sign to…

A: Long position means that when prices when increase from the current position and short position is…

Q: The stock of Business Adventures sells for $50 per share. Its likely dividend payout and end-of-year…

A: Expected return of stock is computed as follows:-Expected return of stock = whereR= return ,P=…

Q: A stock that just gave a dividend of OMR 1.545 and long-term annual growth rate of the company is…

A: Market price of the stock = D1 / ( k – g ) where, D1 = Current dividend x (1+growth rate) ke =…

Q: 1) Based on End-of-Chapter Problem 6 in Chapter 5 The stock of Business Adventures sells for $40 a…

A: 1.Standard deviation of stock = 2. Expected return of Portfolio Comprising of two stocks is…

Q: Consider two stocks: Stocks Current Price Possible Prices after one year Stock ABC $12.00 ABC + =…

A: Stock trading refers to the buying and selling of stocks at different pieces. Profits can be earned…

Q: Back to Assignment Attempts Average / 2 7. Expected dividends as a basisfor stock values A stock's…

A: Future Dividend (Dn):Dn​ = D0​ × (1 + g)nPresent Value of Future Dividend (PV_Dn): PV_Dn = Dn /…

Q: Suppose you know a company's stock currently sells for $60 per share and the required return on the…

A: Dividend per share is a financial metric that represents the portion of a company's profits…

Q: X-Terra stocks just paid a dividend of $2.00 per share (i.e., D0=2.0). If the expected longrun…

A: Calculation of price of the stock: Answer: Price of the stock is $15 Given information: Dividend of…

Q: Consider two stocks: Stocks Current Price Possible Prices after one year Stock ABC $12.00 ABC + =…

A: Stock trading refers to the buying and selling of stocks. With this buying and selling, the…

Q: The stock of Business Adventures sells for $100 per share. Its likely dividend payout and end-of…

A: The rate of return is a measure of the gain or loss made on an investment relative to the amount of…

Q: What is the expected growth rate of the dividend?

A: It is very difficult to calculate the cost of equity capital as compared to debt capital…

Q: You've collected the following information from your favorite financial website. 52-Week Price Lo…

A: Dividend yield is to be calculated by dividing the dividends per share by the share price of the…

Q: Assume Evco, Inc., has a current stock price of $47.06 and will pay a $1.95 dividend in one year,…

A: Expected stock price is calculated by following formula:-Expected stock price =

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.