You are bullish on Telecom stock. The current market price is $62 per share, and you have $6,200 of your own to invest. You borrow an additional $6,200 from your broker at an interest rate of 7.6% per year and invest $12,400 in the stock. a. What will be your rate of return if the price of Telecom stock goes up by 9% during the next year? (Ignore the expected dividend.) (Round your answer to 2 decimal places.) Rate of return % b. How far does the price of Telecom stock have to fall for you to get a margin call if the maintenance margin is 30% ? Assume the price fall happens immediately. (Round your answer to 2 decimal places.) Stock price falls below.

Q: You are bullish on IT stock. The current market price is OMR70 per share, and you have OMR8,000 of…

A: Since more than one question is posted at a time the answer for first question will be provide only…

Q: Frost Stock just paid a dividend per share of $10 and is currently selling for $78. Dividends are…

A: Current Dividend = d0 = $10Current Price of Stock = p0 = $78Growth rate = g = 5%

Q: The Baron Basketball Company (BBC) earned $10 a share last year and paid a dividend of $6 a share.…

A: Value of the Stock = Present value of the future dividends + Present value of the terminal selling…

Q: You want to take a long position on a stock. It costs $2,500 for 1,000 shares, so you deposit $1,250…

A: Computation:

Q: Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $52.93 per share. She…

A: Stock value:The stock value refers to the current market price of a company’s shares, which is…

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: You are considering investing $900 in Higgs B. Technology Inc. You can buy common stock at $21.95…

A: A convertible bond comes with an option for the investor which allows him to convert the bonds into…

Q: Don't provide handwritten soluton.   You are bullish on Telecom stock. The current market price is…

A: Trading on margin is a financial strategy where an investor borrows funds from a broker to purchase…

Q: Integrated Potato Chips just paid a $1 per share dividend. You expect the dividend to grow steadily…

A: concept. according to gordon's growth model , P =  D(1 +g)ke -g where , P = current market price D=…

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: You are bullish on Telecom stock. The current market price is $62 per share, and you have $6,200 of…

A: The maintenance margin is the margin that denotes the smaller equity value that must be kept by the…

Q: Suppose the same firm Amazon will distribute a $5 dividend next year. And you expect the dividend to…

A: A financial valuation technique called the Dividend Discount Model (DDM) is used to calculate a…

Q: You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend…

A: The dividend discount model will be used here. As per the dividend discount model the value of a…

Q: You have just purchased a share of stock for $21.11. The company is expected to pay a dividend of…

A: Required return means the percentage return required over the amount invested. So, required return =…

Q: You have a positive opinion of GM stock, which is currently priced at $200 per share. You believe it…

A: Return on Investment is the amount earned by the investor from his investment. It includes the…

Q: You buy a share of stock for $100 and it pays no dividend. A year later the market price is $105.…

A: Rate of return on stock with no dividend is calculated using following equation Rate of return =…

Q: You are considering investing $800 in Higgs B. Technology Inc. You can buy common stock at $25.00…

A: A convertible bond comes with an option for the investor which allows him to convert the bonds into…

Q: you are analyzing Citi as a potential stock investment. You're expecting them to pay a dividend of…

A: Current Price of Stock is that maximum amount which can paid by the investor for purchasing the…

Q: You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend…

A: The capital asset pricing model (CAPM) represents the minimum rate of return required by investors…

Q: She Goes, Inc., will pay a year-end dividend of $3 per share. Investors expect the dividend to grow…

A: Gordon's growth model is one of the most commonly used variations of the dividend discount model.…

Q: 1) A reasonable way to put a value on a share of stock is to discount the stream of expected future…

A: Value per share= PV of future dividend

Q: You Invest $3000 by buying 100 shares of Driss Inc at a price of $30 per share. One year from now,…

A: IRR is the break-even rate of return at which the present value of cash flow is equal to the initial…

Q: What is the value of the stock based on the dividend discount model?  If the price of the stock in…

A: We can determine the intrinsic price of the stock using the formula below:If the intrinsic price is…

Q: Suppose you sell short 200 shares of BP ADR currently selling at $40 per share. You give your broker…

A: In short selling one does not hold stock but promises to buy at lower prices later and this is…

Q: You are interested in buying the stock of a company. You expect the following annual dividends for…

A: Fair price of the stock is that amount which can be paid by the investor for purchasing the stock in…

Q: You are bullish on GCB stock. The current market price is GHS5.00 per share, and you have GHS5,000…

A: The question is based on the concept of Security valuation

Q: Assume that you are in a perfect Modigliani-Miller world (no taxes, no bankruptcy costs, etc.). A…

A: Dividends are paid out of net income and a dividend is a sharing of income with shareholders and it…

Q: You have $50,000 to invest. You want to either invest it all in one stock, or in options. The stock…

A: Stocks represent ownership in a company and are bought and sold in the stock market. They can…

Q: 3. You are bullish on ITC stock. The current market price is $100 per share, and you have $400,000…

A: 1.Number of shares bought = 2.rate of return =

Q: You are bullish on Telecom stock. The current market price is $44 per share, and you have $2,200 of…

A: A margin call is a call where the equity amount has to be raised into the account by the brokerage…

Q: Jenny Banks is interested in buying the stock of Fervan, Inc., which is increasing its dividends at…

A: Stock is the security which is offered to collect the funds. Stock prices fluctuate on a daily…

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: Suppose you require a 10% return on your investments while purchasing a s y trading at $50. The…

A: Return on investment, as the name indicates, is the return or the profit that accrues to you from…

Q: You are bullish on Telecom stock. The current market price is $110 per share, and you have $22,000…

A: Current Market Price = $110Owned Funds = $22,000Borrowed Funds = $22.000Total Initial Investment =…

Q: Jenny Banks is interested in buying the stock of Fervan, Inc., which is increasing its dividends at…

A: Computation of current value of the stock is as follows:Current price=Dividend(Required…

Q: Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $36.44 per share. She…

A: Purchase price of share = $36.44Annual dividend =$4.28Stock price in year 3 = $43.62

Q: You are trying to decide whether to invest in a "value" stock (Hawaii Utility Co.) or a "growth"…

A: Discount rate is the required rate of return investors expect to earn when investing in a stock.…

Q: Assume that you are considering the purchase of a stock which will pay dividends of $4.50 during the…

A: A dividend is a payment made to shareholders by a company in cash or extra stock. As compensation…

Q: You were offered to buy shares of stock of a newly listed company. You decided to take 300 shares at…

A: Using a Future value formula we can determine the time it takes to double the initial amount when…

Q: What steps would be involved?

A: Arbitrage is the strategy applied by the investor to take the benefit of mispricing, at various…