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  • Ch3 Buying On Margin (Fixed)

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    Alfie
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    This document contains a table that calculates returns on an investment made with and without margin. It shows that with an initial $10,000 investment, buying 400 shares of stock at $50 per share with 50% margin resulted in a net loss of $4,160 or -41.6% return over 6 months. In comparison, the same investment without margin had a -18.8% return. The table calculates capital gains/losses on the stock, dividends earned, and interest paid on the margin loan to determine the overall returns.

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    Ch3 Buying on Margin(Fixed)

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    This document contains a table that calculates returns on an investment made with and without margin. It shows that with an initial $10,000 investment, buying 400 shares of stock at $50 per share with 50% margin resulted in a net loss of $4,160 or -41.6% return over 6 months. In comparison, the same investment without margin had a -18.8% return. The table calculates capital gains/losses on the stock, dividends earned, and interest paid on the margin loan to determine the overall returns.

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    © All Rights Reserved
    Téléchargez comme XLSX, PDF, TXT ou lisez en ligne sur Scribd
    Signaler comme contenu inapproprié
    4 vues2 pages

    Ch3 Buying On Margin (Fixed)

    Transféré par

    Alfie
    This document contains a table that calculates returns on an investment made with and without margin. It shows that with an initial $10,000 investment, buying 400 shares of stock at $50 per share with 50% margin resulted in a net loss of $4,160 or -41.6% return over 6 months. In comparison, the same investment without margin had a -18.8% return. The table calculates capital gains/losses on the stock, dividends earned, and interest paid on the margin loan to determine the overall returns.

    Droits d'auteur :

    © All Rights Reserved
    Téléchargez comme XLSX, PDF, TXT ou lisez en ligne sur Scribd
    Signaler comme contenu inapproprié
    sur 2

    A B C D E F G H I

    1 Chapter 3
    2 Buying on Margin Action or Formula Ending Return on Ending Return with
    3 for Column B St Price Investment St Price No Margin
    4 Initial Equity Investment $10,000.00 Enter data
    5 Amount Borrowed $20.00 $20.00
    6 Initial Stock Price $50.00 Enter data 25.00 25.00
    7 Shares Purchased 30.00 30.00
    8 Ending Stock Price $40.00 Enter data 35.00 35.00
    9 Cash Dividends During Hold Per. $0.60 Enter data 40.00 40.00
    10 Initial Margin Percentage 50.00% Enter data 45.00 45.00
    11 Maintenance Margin Percentage 30.00% Enter data 50.00 50.00
    12 55.00 55.00
    13 Rate on Margin Loan 8.00% Enter data 60.00 60.00
    14 Holding Period in Months 6 Enter data 65.00 65.00
    15 70.00 70.00
    16 Return on Investment 75.00 75.00
    17 Capital Gain on Stock 80.00 80.00
    18 Dividends
    19 Interest on Margin Loan
    20 Net Income LEGEND:
    21 Initial Investment $10,000.00 B4 Enter data
    22 Return on Investment Value calculated
    A B C D E F G H I
    1 Chapter 3
    2 Buying on Margin Action or Formula Ending Return on Ending Return with
    3 for Column B St Price Investment St Price No Margin
    4 Initial Equity Investment $10,000.00 Enter data -41.60% -18.80%
    5 Amount Borrowed $10,000.00 (B4/B10)-B4 $20.00 $20.00
    6 Initial Stock Price $50.00 Enter data 25.00 25.00
    7 Shares Purchased 400 (B4/B10)/B6 30.00 30.00
    8 Ending Stock Price $40.00 Enter data 35.00 35.00
    9 Cash Dividends During Hold Per. $0.60 Enter data 40.00 40.00
    10 Initial Margin Percentage 50.00% Enter data 45.00 45.00
    11 Maintenance Margin Percentage 30.00% Enter data 50.00 50.00
    12 55.00 55.00
    13 Rate on Margin Loan 8.00% Enter data 60.00 60.00
    14 Holding Period in Months 6 Enter data 65.00 65.00
    15 70.00 70.00
    16 Return on Investment 75.00 75.00
    17 Capital Gain on Stock -$4,000.00 B7*(B8-B6) 80.00 80.00
    18 Dividends $240.00 B7*B9
    19 Interest on Margin Loan $400.00 B5*(B14/12)*B13
    20 Net Income -$4,160.00 B17+B18-B19 LEGEND:
    21 Initial Investment $10,000.00 B4 Enter data
    22 Return on Investment -41.60% B20/B21 Value calculated

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