Shares of high performing internet stock

Assignment Help Financial Management

Reference no: EM131883069

Tom and Mary have each decided to buy 100 shares of a high performing Internet stock. The current price of the stock is $240 per share. Tom places a market order while Mary has decided to place a limit order at $230 per share. One week later, the price of the stock never did decline but rose steadily to $305 per share.

1. Assume that you buy the stock on margin paying $80 per share and borrowing the rest from your broker at 8.0% annual interest. You hold the stock for one year and then sell it for $150 per share. Calculate your return on the stock. (Just for Reference)

Rework question 1 again but assume that you instead decide to use your personal funds rather than buying on margin to make the stock purchase. Determine what the return on your stock is. Show all work. Check figure: R=29.17%.

Reference no: EM131883069

Questions Cloud

What effect might restrictions have on global companies : The European Community's Directive on Data Protection strictly limits how database information is used and who has access to it.

Should there be a global internet privacy policy : Should there be a global Internet privacy policy? What is your opinion of the British Identity Card discussed in this chapter?

Which financial statement would be most important to you : Which financial statement would be most important to you and why?

How might users change the behaviors : Google, Inc. had a unique advantage as of March 2012. By combining information about user activity from its many popular applications.

Shares of high performing internet stock : Tom and Mary have each decided to buy 100 shares of a high performing Internet stock. The current price of the stock is $240 per share.

Calculate the average return and risk of the portfolio : Calculate the average return and risk of the portfolio. What is the average return and standard deviation of returns for these two companies?

Examine an environmental issue : Examine an environmental issue and apply one of the ethical theories to it to understand how human interactions with the natural environment .

What mutual funds would you recommend : What mutual funds would you recommend for a 22 year old college graduate who just landed their first real career job?

Explain what are your impressions of the modern man : Based on Hemingway and TS Eliot, explain what are your impressions of the "Modern Man"? Explain how the source contributed to your understanding.

User Account

All Pages