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Saved Help Se Problem 3-14 DRK, Inc., has just sold 60,000 shares in an initial public offering. The underwriter's explicit fees were $36,000. The offering price for the shares was $68, but immediately upon issue, the share price jumped to $70.00 a. What is the total cost to DRK of the equity issue? Total cost b. Is the entire cost of the underwriting a source of profit to the underwriters? Yes No 1 of 5 !!! Next > Co search im Help Save & ch De Trader opens a brokerage account and purchases 200 shares of Internet Dreams at $46 per share. She borrows $2,400 from her broker to help pay for the purchase. The interest rate on the loan is 8%. a. What is the margin in Dee's account when she first purchases the stock? ! Margin b. If the share price fails to $36 per share by the end of the year, what is the remaining margin in her account? (Round your answer to 2 decimal places.) Remaining margin (6000) S c. If the maintenance margin requirement is 30%. Will she receive a margin call? Te to search Problem 3-16 Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $85 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $85 to $95.50. and the stock has paid a dividend of $13.00 per share. a. What is the remaining margin in the account? Remaining margin S 29.300 b-1. What is the margin on the short position? (Round your answer to 2 decimal places.) Short margin 2359 S here to search Check my w Problem 3-18 You are bullish on Telecom stock. The current market price is $15 per share, and you have $3,000 of your own to invest. You borrow an additional $3,000 from your broker at an interest rate of 9.5% per year and invest $6,000 in the stock a. What will be your rate of return if the price of Telecom stock goes up by 11% during the next year? (ignore the expected dividend) (Round your answer to 2 decimal places.) Rate of return s b. How far does the price of Telecom stock have to fall for you to get a margin call if the maintenance margin is 30%? Assume the price fall happens immediately. (Round your answer to 2 decimal places.) Stock price talls below

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