Need help this question You own 12 percent, or 15,000 shares, ofPrinters Ink stock that has a totalmarket value of $678,300. By whatpercentage will the total value of yourinvestment in this firm change if thecompany sells an additional 12,500shares of stock at $43.50 a share andyou do not buy any?

Step 1: Calculate the current total number of outstanding sharesYou own 12% of the company, which is…

Answered: You own 12 percent, or 15,000 shares,…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 11P

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18) Can i please get help with this practice question.
Suppose that you sell short 1,000 shares of Xtel, currently selling for $20 per share, and give your broker $15,000 to establish your margin account.a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $22; (ii) $20; (iii) $18? Assume that Xtel pays no dividends.b. If the maintenance margin is 25%, how high can Xtel’s price rise before you get a margin call?c. Redo parts (a) and (b), but now assume that Xtel also has paid a year-end dividend of $1 per share. The prices in part (a) should be interpreted as ex-dividend, that is, prices after the dividend has been paid.
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You own 12 percent, or 15,000 shares, of Printers Ink stock that has a total market value of $678,300. By what percentage will the total value of your investment in this firm change if the company sells an additional 12,500 shares of stock at $43.50 a share and you do not buy any?