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.

Reviews

Write a Review

Financial Management Questions & Answers

  This growth is expected to continue

This growth is expected to continue. What is the value of this stock at the beginning of 2007 when the required return is 9.1 percent?

  What will the firms operating profit be at sales

If a firm has a break-even point of 40,000 units and the contribution margin on the firm's single product is $4.00 per unit and fixed costs are $60,000, what will the firm's operating profit be at sales of 30,000 units?

  What would be third year future value

What would be the third year future value?

  What are the two remedies bill is most likely to use

Bill Buyer ordered 1,000 bushels of wheat from Sam Seller for $2 per bushel, delivery due on July 12, payment due on July 30. Sam didn't deliver on July 12. The market price of wheat on July 12 was $2.25 per bushel, but supply is extremely short. Wha..

  Make calculations in cost estimates has advantage

Using BY$ to make calculations in cost estimates has the advantage that ______

  Calculate? sharpe measure for your portfolio

Calculate? Sharpe's measure for your portfolio. did you do better or worse than the market from a? risk/return perspective?

  Discuss the risks facing these institutions within context

Banks and other depository institutions make loans, invest in government securities, buy and sell federal funds, and accept deposits with a wide spectrum of maturities and with many payable on demand. Briefly discuss the risks facing these institutio..

  What is average income tax rate

Average versus Marginal Tax Rate: Suppose Franklin Corporation had pre-tax income of $300,000 in 2010 and that the firm would have paid $100,250.00 in federal income taxes. What is Franklin’s average income tax rate?

  Use the technical analysis tools to predict

Use the technical analysis tools to predict where the share price of Fortescue Metal Group will be at the 31st December 2017.

  What are the monthly payments

Someone leases a car with the following terms: monthly payment, five year term, 5% annual interest rate, initial value of the lease is $35,000, and value at the end of the lease is $10,000. What are the monthly payments?

  The black bird company plans an expansion

The Black Bird Company plans an expansion. The expansion is to be financed by selling $52 million in new debt and $124 million in new common stock. The before-tax required rate of return on debt is 10.73% percent and the required rate of return on eq..

  Tax treatment of payments to securities holder

Regarding the tax treatment of payments to securities holders,

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd