margin loan investment on $400 worth of shares has an initial LVR of 50%. If the maximum allowable LVR is 80%, there will be a margin call when the share value goes below = $

Q: If you can earn 13% percent on similar-risk investments, what is the most you would be willing to…

A: We will use the dividend discount model here. As per the dividend discount model the intrinsic value…

Q: Suppose you short sell 1000 Intel shares at $20 per share and provide your broker with an initial…

A: The initial margin is the money that an investor must place in their accounts before the initiation…

Q: The market risk premium is given as 10.3 percent. The risk free rate is 2.9 percent. You invest…

A: Capital Asset Pricing Model (CAPM) is a financial model to determine the minimum required rate of…

Q: You purchase 500 shares of Compucon for $120 per share using a margin account. This transaction…

A: Margin call price can be found by using the following formula:

Q: You decide to enter a short-selling strategy with 100 shares. The current price is $70, initial…

A: The objective of this question is to determine the price that would trigger a maintenance call in a…

Q: S Suppose you have $30,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE),…

A: The objective of the question is to calculate the annualized return from two investments in…

Q: The current risk-free rate of return is 4.6%. The market risk premium is 6.6%. D'Amico Co. has a…

A: As per CAPM  Cost of equity = Risk free rate + beta * Market risk premium

Q: The risk-free return is 5%, Company x has a beta of 1.5 and an expected return of 20%. Calculate the…

A: Solution:- Capital Asset Pricing Model (CAPM) is an equity model which calculates the required rate…

Q: Shares in SergeantPepper will earn a return of 5.50% during a bull market, and 5.00% during a bear…

A: To Find:  covariance of the two security returns

Q: Show work/formulas used. Calculate the required return for new AND existing equity if the stock…

A: The cost of existing and new equity can be determined by using the constant dividend growth rate…

Q: You invest $10,000 in a long position in a stock priced at $44 per share. Intial margin is 70% and…

A: A margin call is made by the broker to the investor asking them to deposit an extra amount in their…

Q: A share has expected dividend stream of 10, 20 40 and then 0 from then on (bankruptcy). Its current…

A: The internal rate of return is a formula used to determine the rate of return on an investment.…

Q: $77 per share $66 per share Answer is complete but not entirely correct. Annualized Return Option…

A: We can determine the return from stock and call option using the formula below:The formula above…

Q: You are thinking of buying a stock that has just made an annual dividend of 16.59$. Given that you…

A: The present value of a stock is determined by using Dividend Discounting Model(DDM), where the…

Q: Which of the following would offer the best return on investment? Assume that you buy $5,000 in…

A: Return on investment is used to evaluate the profitability and effectiveness of a company or an…

Q: You have $10,000 and you decide to borrow an additional $10,000 from your broker (the maximum…

A: Equity value = $10,000 Borrowed value = $10,000 ---------------------------------------------------…

Q: Be-low Mining, Inc., is trying to decide whether it should purchase or lease new earthmoving…

A: Formula to make the decision of buy or lease is as follows: P = F(P/F, i, n) P = A(P/A, i, n)

Q: You are thinking of purchasing a cumulative, convertible preferred share with a stated dividend of…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Consider a market where the assumptions behind the Black-Scholes model hold. A non-dividend paying…

A: The Black-Scholes Model is a model that was developed for the pricing of European options based on…

Q: The Hua Company has decided to undertake a large project. Consequently, there is a need for…

A: Paid in capital stock consist of preferred and common stock where preferred shares are issued by the…

Q: You are looking into purchasing stock of Broken at of your own money as possible (i.e. maximizing…

A: Margin plays a very important role for retail investors who do not have the entire sum of money to…

Q: A project hasan equity beta of 1.10 (based on similar listed company after making all necessary…

A: As per the Capital Asset Pricing Model (CAPM), the cost of equity is

Q: What position would you take on Speculative holdings

A: Speculative holding is an option that allows the investors to avoid any capital loss by holding the…

Q: What is your annualized return from these two investments if, in six months, MMEE is selling for $67…

A: Call Option Price: The price of a call option tends to increase as the underlying stock price rises.…

Q: Jades Corp. has decided to undertake a large project. Consequently, there is a need for additional…

A: Preferred stock, also known as preference shares or preferred shares, is a type of stock that…

Q: broker requires a 30% maintenance margin, at what share price will you be subject to a margin call?…

A: First we need to determine the margin % using the formula below:

Q: Suppose you buy 700 shares of XYZ currently trading at $63 per share with a loan from your broker.…

A: If you buy shares on margin then you don't need to pay entire purchase value from your pocket. you…

Q: The current risk-free rate of return is 4.67%, while the market risk premium is 6.63%. The D'Amico…

A: In the given question we need to compute the D'Amico's cost of equity using Capital asset pricing…

Q: Suppose Firm 1 is 100% equity financed.  Firm 1 has a project available that offers a 10% return on…

A: Required return for the firm is calculated using following equation Required rate of return = Risk…

Q: Calculate the expected return and variance on 100 shares of AAPL with and without a zero interest…

A: The question is based on the concept of calculation for expected return and variance with…

Q: Suppose you have $60,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE), which…

A: When considering an investment, evaluating different avenues for potential returns is essential.…

Q: margin

A: Equity = market value - margin - broker charges

Q: You have been watching Anglo Platinum (JSE: AMS) and believe that the share price should increase…

A:

Q: You have opened an account with a local broker & you placed an order for 4,000.0 shares of KLM corp.…

A: Given: Ordered placed 4000 shares @ 8 per shares The initial margin is 50% Broker’s rate = 6.0%…

Q: Suppose your company has an equity beta of .62 and the current risk-free rate is 4.1%. If the…

A: Equity capital refers to funds raised by a firm by diluting its equity or ownership. With issue of…

Q: equityholders at date 1? What kind of financial product has the same payoffs? Please describe the…

A: a)At date 1 ,two possible values are possible: 100*120%=120 or 100*90%=90 d=downmove=0.9 and upmove…

Q: A share is expected to pay a dividend of $4.00. If the dividend is expected to grow at an annual…

A: Following details are given in the question: Expected dividend (D1) = $4 Growth rate (g) = 5% = 0.05…

Q: You are about to purchase OSTK, which is currently trading at $20 per share.  You have $5,000 of…

A: The maintenance margin is the margin below which we will get a margin call. A margin call is a…

Q: Suppose you had just gone long (purchased) on lot of Syarikat XYZ stock at a price of RM 15.00 each,…

A: Financial derivatives known as call options and put options provide the holder the right, but not…

Q: You decided to invest $10,000 of your savings in a stock whose current price is $25 per share. To…

A: Maintenance margin and margin call are terms commonly used in the context of margin trading, which…

Q: One of the categories of options available to investors and speculators is LEPOs. Assuming 7.00 per…

A: Derivatives refer to contract that derives their values from an underlying asset. Future contacts,…

Q: Suppose you have $55,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE), which…

A: Current selling price of stock = $110Exercise price of option = $110Premium = $5.5

Q: You are bullish on XYZ stock. The current market price is $100 per share, and you have $10,000 of…

A: Margin call refers to the amount which is deficit to maintain the maintenance margin account.

Q: The risk-free rate of return (r) is 2% and the expected market rate of return (rm) is 10%. The…

A: In this we have to calculate expected return using CAPM model.

Q: daha Itd has a short term investment worth $100 000 which is traded on the stock exchange. the…

A: Short-term investments are crucial components of financial portfolios, often subject to market…