GEN COMBO LOOSELEAF INVESTMENTS; CONNECT ACCESS CARD
11th Edition
ISBN: 9781260201550
Author: Bodie
Publisher: MCG
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Chapter 3, Problem 16PS
Summary Introduction
Adequate information:
The investor short 100 share at a price of $21 of snow stock on January 01. A dividend was paid on March 1 which accounts for $3 per share. In order to cover the short sell, on April 01 the stock is purchased at a price of $15 per share. A Commisiion of 50 cents is paid in each transaction.
To calculate:
The value of the investor's account as on April 1.
Introduction:
Stock stands to be the general term which is taken into consideration for describing the company's ownership certificates. On the other hand share refers to the company's stock certificate. When a share of a particular company is held by an investor, he is known as a shareholder.
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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 own 1,000 shares of stock in Avondale Corporation. You will receive a $3.45 per
share dividend in one year. In two years, the company will pay a liquidating dividend of
$62 per share. The required return on the company's stock is 15 percent.
a. Ignoring taxes, what is the current share price of your stock? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. If you would rather have equal dividends in each of the next two years, how many
shares would you sell in one year? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
c. What would your cash flow be for each year for the next two years? Hint: Dividends
will be in the form of an annuity. (Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
Answer is not complete.
a. Share price
b. Number of shares
c. Cash flow
1,950.00
$ 64,242.50 X
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?
Chapter 3 Solutions
GEN COMBO LOOSELEAF INVESTMENTS; CONNECT ACCESS CARD
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