INVESTMENTS-CONNECT PLUS ACCESS
INVESTMENTS-CONNECT PLUS ACCESS
11th Edition
ISBN: 2810022611546
Author: Bodie
Publisher: MCG
Question
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Chapter 3, Problem 7PS
Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

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no ai   do not answer this question if data is not clear or image is blurr. but do not amswer with unclear values. i will give unhelpful.
Estefan Industies has a new project available that requires an initial investment of sex million. The project will provide unlevered cash flows of $925,000 per year for the next 20 years. The company will finance the project with a debt-value ratio of 35. The company's bonds have a YTM of 5.9 percent. The companies with operations comparable to this project have unlevered betas of 1.09, 1.17, 1.28, and 1.20. The risk-free rate is 3.6 percent, and the market risk premium is 7 percent. The tax rate is 21 percent. What is the NPV of this project?
no ai   do not answer this question if data is not clear or image is blurr. please comment i will write values . but do not amswer with unclear values. i will give unhelpful.
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