uppose that Kaka Plc currently is selling at $50 per share. You buy 900 shares using $22,050 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. Required If the maintenance margin is 20%, how low can Kaka Plc’s price fall before you get a margin call? (Round your answer to 2 dec
Q: What payment is required to pay off a loan of $ 2,550.00 at 6.9% sixteen months later?
A: Future value is the amount we get on the investment at a particular rate of return.. In this case,…
Q: Which of the following statements more accurately describes the treasurer than the controller? (You…
A: Treasurer is referred to as an individual, who is responsible for the movement of the treasury of…
Q: Vijay
A: The objective of the question is to calculate the Net Present Value (NPV) of leasing a new stamping…
Q: A 25-year bond issue of 5,900,000 and bearing interest at 6.5% payable annually is sold to yield…
A: A bond is a debt market instrument that organizations for their capital needs issue, it pays the…
Q: The city is planning to demolish and rebuild a new shopping mall. In hopes of landing the…
A: Given Data- Standard Design Cost: $60,000- Complex Plan Cost: $260,000- Contract Value: $1.3…
Q: is considering starting a new business. The company would require $475,000 of assets, and it would…
A:
Q: A company recently reported $2100 of sales, $1, 100 of operating costs other than depreciation, and…
A: 1. **Sales Revenue**: $21002. **Operating Costs (Excluding Depreciation)**: $11003.…
Q: A self employed person deposit $1,250 annually in a retirement account that earns 5.5 percent. What…
A: Future Value (FV) is a financial metric essential for projecting the estimated worth of an…
Q: me one-month future is trading at $50,000. If the USD interest rate is 5%, where will Bitcoin spot…
A: Spot rate=$45000One month future=$50000Interest rate=5%
Q: The yield to maturity of a $1,000 bond with a 6.8% coupon rate, semi-annual coupons, and two years…
A: Understanding the yield to maturity (YTM) of a bond is crucial for investors seeking to evaluate…
Q: Assume that your grandmother has sold her house on 31.12.2020. The house was partially paid for with…
A: The problem case wants to calculate the interest income earned in 2023 from the bond issued at the…
Q: Consider the following information for Watson Power Company: Debt: Common stock: Preferred stock:…
A: Weighted Average Cost of Capital (WACC) :The weighted average cost of capital, or WACC for short, is…
Q: Ime that 7% and that its dividend yield is 8%. C&J is about as risky as the average firm in the…
A: Constant growth rate = 7%Dividend yield = 8%Dividend (D0) = $1.5Growth rate in year 1 (G1) =…
Q: You plan to retire in 20 years. At the point of retirement, you want to be able to withdraw 25478 at…
A: The concept of time value of money will be used here. As per the concept of time value of money the…
Q: Assess the impact(s) of the COVID-19 pandemic on the stock market in the United States.
A: The objective of this question is to evaluate the effects of the COVID-19 pandemic on the US stock…
Q: Disturbed, Inc., had the following operating results for the past year: sales = $22,616;…
A: Operating cash flow refers to the cash flow generated by the company from it's Operation.Operating…
Q: C7 Taylor Corp. is experience rapid growth in their core business. They expect to see dividends grow…
A: Current price of stock is the price which can be paid for purchase of the stock. It is also called…
Q: Suppose a firm has 16 million shares of common stock outstanding and five candidates are up for…
A: In cumulative voting, shareholders are allowed to cast all their votes for a single candidate or…
Q: A $1000 par value bond will have a current market value of $1000 when... Select one: a. bond's…
A: Bond is a debt security or financial instrument that represents a formal contract between issuer…
Q: Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax…
A: The value that is derived by the division of the expected standard deviation value and the expected…
Q: XYZ Corp. has announced that it will take four rights to buy a new share in the offering at a…
A: A rights issue is a corporate finance strategy employed by publicly traded companies to raise…
Q: trust fund for a childs education is being set up by a single payment so that at the end of 15 years…
A: The present worth of the amount that is required to be accumulated at the end of 15 years at a given…
Q: DJI FTSE100 DAX CAC40 NIKKEI HSI BOVESPA GOLD 4-Jan-16 15944.46 5990.4 9880.82 4380.36 17163.92…
A: A mathematical construct called a covariance matrix is used to summarize the strength and degree of…
Q: 3) The Rent It Company declared a dividend of $.60 a share on October 20th to holders of record on…
A: > Given data:> Company dividend shares = 0.60> Company purchased shares = 100
Q: Cash dividends are initially recorded on which date? Multiple Choice O Date of record. O Balance…
A: The correct answer to the question is "Date of Declaration".This is because date of declaration is…
Q: 17. You have three zero coupon bonds with the following market prices: Bond A for $97.087, Bond B…
A: We will first calculate the spot rate curve based on the bond prices given. Once we have the spot…
Q: What is the return (%) that can be made from correctly exploiting the mispricing given these three…
A: The exploitation of mispricing means taking advantage of profitable opportunities due to the…
Q: 17. You are considering two insurance settlement offers. The first offer includes annual payments of…
A: Present value refers to the current value of the future cash flow. present value of the future cash…
Q: An investor would like to purchase a new apartment property for $2 million. However, she faces the…
A: We have to use an excel spreadsheet tomake all the calculations.
Q: A company is considering buying a piece of machinery that costs $20,000 and has a salvage value of…
A: Internal rate of return Or IRR is the rate or percentage that is minimum required to cover the…
Q: Morrison Corporation had the following common stock record during the current calendar year:…
A: Given the information you provided:Outstanding on January 1: 2,110,000 sharesAdditional shares…
Q: A demand loan of $10,000 is repaid by payments of $5000 in one year, $6000 in four years, and a…
A: Loan amount refers to the money that is borrowed by the borrower from the lender at specified rate…
Q: A company lease equipment for 7 years. The equipment cost 28,000 and the owner wants to earn 9.5…
A: The objective of the question is to calculate the annual lease payments that the company needs to…
Q: An investment offers to triple your money in 28 months. What rate in percent for three months are…
A: This is based on the concept of compounding. A sum of money invested today grows in future due to…
Q: A 90 day US Tbill with a par value of $1000 is issued at a discount of 9%. Its bond equivalent yield…
A: Bond equivalent yield refers to the return earned through the investment of a bond after converting…
Q: A company expects a 20% return on equity invested entirely in new projects. The company's management…
A: Return on equity = 20%Retention ratio =30%Earnings per share = €3Expected return = 12%
Q: A 5-year Treasury bond has a 4.6% yield. A 10-year Treasury bond yields 6.3%, and a 10-year…
A: To calculate the yield on a 5-year corporate bond, we first need to determine the spread between the…
Q: A call option on MassComputer Corp. is trading with a strike price of $100 and an expiration date on…
A: The objective of this question is to calculate the net profit or loss from buying a call option on…
Q: what is the Difference between derivatives and insurance contract
A: Derivatives and insurance contracts are both financial instruments used for managing risk, but they…
Q: The risk-free rate, average returns, standard deviations, and betas for three funds and the S&P 500…
A: M2 Measure for Portfolio refers to the Modiglaini Risk adjusted performance or return of the…
Q: The Morrit Corporation has $510,000 of debt outstanding, and it pays an interest rate of 9%…
A: Debt outstanding = $510,000Interest rate = 9%Annual sales = $3,000,000Tax rate = 25%Net profit…
Q: Household population of Toril simple demand 50 75 125 fancy demand 50 75 125 simple & fancy demand…
A: Net cash flow is defined as the difference between total cash inflows and total cash outflows during…
Q: Even though most corporate bonds in the United States make coupon payments semiannually, bonds…
A: > Given data:> Time remaining o maturity (n) = 6 years> YTM = 9.9%> Coupon = 7.9%*1000 =…
Q: 7. A car buyer figures they can afford 60 equal monthly payments of $424 per month, starting next…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: Prasad's company has initial investment 66000 and cash flows for each year 11000for 7 years, what is…
A: The Internal Rate of Return (IRR) is a fundamental financial metric employed to assess the…
Q: Transaction: Company received land in exchange for ownership in company. In the table below, show…
A: The accounting equation is a fundamental principle in accounting that states:Assets = Liabilities +…
Q: While Mary Corens was a student at the University of Tennessee, she borrowed $12,000 in student…
A: Tenure is the loan refers to the time period by which loan is repaid along with the applied interest…
Q: An investor has $60,000 to invest in a $280,000 property. He can obtain either (option A) a $220,000…
A: The effective interest rate for monthly payments can be determined by using the EFFECT function in…
Q: You have two opportunities to invest $5,000 for 10 years. The first provides a yield of 8% annually,…
A: To compare the two investments, we can use the compound interest formula:Where:A is the future value…
Q: yses typically 1. be price leaders. II. benefit more from economies of scale. III. have better R&D…
A: Companies with strong market positions have a larger market share compared to companies with less…
Suppose that Kaka Plc currently is selling at $50 per share. You buy 900 shares using $22,050 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%.
Required
If the maintenance margin is 20%, how low can Kaka Plc’s price fall before you get a margin call? (Round your answer to 2 decimal places.)
Step by step
Solved in 3 steps with 2 images
- Suppose that XTel currently is selling at $40 per share. You buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 8%. Required:a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (i) $44; (ii) $40; (iii) $36? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can XTel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to requirement b change if you had financed the initial purchase with only $10,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if XTel is selling after one year…Suppose that XTel currently is selling at $50 per share. You buy 800 shares using $30,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. Required:a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (i) $56; (ii) $50; (ii) $44? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can XTel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to requirement b would change if you had financed the initial purchase with only $20,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your margined position (assuming again that you invest $30,000 of your own money) if XTel is selling after one…Suppose that XTel currently is selling at $50 per share. You buy 800 shares using $30,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. Required:a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (i) $56; (ii) $50; (ii) $44? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can XTel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to requirement b would change if you had financed the initial purchase with only $20,000 of your own money? (Round your answer to 2 decimal places.)
- Suppose that Xtel currently is selling at $20 per share. You buy 1,000 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 8%.a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $22; (ii) $20; (iii) $18? What is the relationship between your percentage return and the percentage change in the price of Xtel?b. If the maintenance margin is 25%, how low can Xtel’s price fall before you get a margin call?c. How would your answer to (b) change if you had financed the initial purchase with only $10,000 of your own money?d. What is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if Xtel is selling after 1 year at: (i) $22; (ii) $20; (iii) $18? What is the relationship between your percentage return and the percentage change in the price of Xtel? Assume that Xtel pays no dividends.e.…Suppose that Xtel currently is selling at $52 per share. You buy 500 shares using $20,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 9%. a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $56.68; (ii) $52; (iii) $47.32? What is the relationship between your percentage return and the percentage change in the price of Xtel? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can Xtel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to (b) change if you had financed the initial purchase with only $13,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your margined position…Suppose that Xtel currently is selling at $52 per share. You buy 500 shares using $20,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 9%. a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $56.68; (ii) $52; (iii) $47.32? What is the relationship between your percentage return and the percentage change in the price of Xtel? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can Xtel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to (b) change if you had financed the initial purchase with only $13,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your…
- Suppose that Xtel currently is selling at $46 per share. You buy 250 shares using $8,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 6%. Required: a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? b. If the maintenance margin is 25%, how low can Xtel's price fall before you get a margin call? c. How would your answer to (b) change if you had financed the initial purchase with only $5,750 of your own money? d. What is the rate of return on your margined position (assuming again that you invest $8,000 of your own money) if Xtel is selling after 1 year at: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? Assume that Xtel…Suppose that Brue currently is selling at $50 per share. You buy 900 shares using $36,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. What is the percentage increase in the net worth of your brokerage account if the price of Brue immediately changes to (a) $56; (b) $50; and (c)$44?Suppose that Brue currently is selling at $50 per share. You buy 900 shares using $36,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. What is the rate of return on your margined position if Brue is selling after ONE year at (a)$56; (b)$50; and (c)$44?
- Suppose you buy 700 shares of XYZ currently trading at $63 per share with a loan from your broker. Your initial margin requirement is 50%. The maintenance margin is 30%. Suppose the price suddenly (and instantaneously) jumps down to $42 per share, triggering a margin call. As a result of the margin call, you are required to get your margin back up to 50%, by selling off shares to pay down your margin loan (you could use cash, but you do not want to throw good money after bad). How many shares to you need to sell (using the proceeds to pay down your margin loan) to get your margin back up to 50%? Assume that you can sell shares at $42 per share and assume the interest rate on your margin loan is 0%. Ignore taxes and transaction costs. Important Hint: If you get a fractional number of shares as your answer, round up.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: $22, $20, and $18? Assume that Xtel's 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 has paid a year end dividend of $1 per share. The pruces in part a should be interpreted as ex-dividend, that is prices after the dividend has been paid.You purchase 800 shares of CUW at $71.51 using your full margin which as an initial margin of 70% (or 0.70). The maintenance margin is 45% (or 0.45). At what price will you get your margin call?" (Neglect any interest on the cash loan)