1. Miss V is bullish about the stock of Ghana Commercial Bank (GCB). She is very confident in the five-year strategic plan announced by GCB's Board. Miss V is planning to have her honey moon in the Maldives in a year's time. She hopes that the stock will do very well so that she can have a great time in the Maldives. She has therefore decided to invest most of her savings of about GHS 61,320 in GCB's stock. GCB's last trading price on the Ghana Stock Exchange was GHS 5.11. Due to Miss V's enthusiasm, she has approached her investment banker to see if she can get a loan to partly finance the purchase of the stock. The investment bank charges an interest rate of 30% per annum on loans to its clients. Miss V has decided to purchase about 20,000 shares in Ghana Commercial Bank. The margin requirement has been given as 60%. A. How much can Miss V borrow from her broker? B. If Miss V has to pay commissions of GHS 2000, what will be the profit/loss and the return on the capital she invested if the stock price increases to GHS 8 in a year's time? What about if the stock falls to GHS 2.22 per share? C. Assuming Miss V decided not to take the loan but to invest only with her savings, if she pays a commission of GHS 2,000, what will be her profit/loss and return on the capital she invested if the stock price increases to GHS 8 in a year's time? What about if the stock falls to GHS 2.22 per share?
1. Miss V is bullish about the stock of Ghana Commercial Bank (GCB). She is very confident in the five-year strategic plan announced by GCB's Board. Miss V is planning to have her honey moon in the Maldives in a year's time. She hopes that the stock will do very well so that she can have a great time in the Maldives. She has therefore decided to invest most of her savings of about GHS 61,320 in GCB's stock. GCB's last trading price on the Ghana Stock Exchange was GHS 5.11. Due to Miss V's enthusiasm, she has approached her investment banker to see if she can get a loan to partly finance the purchase of the stock. The investment bank charges an interest rate of 30% per annum on loans to its clients. Miss V has decided to purchase about 20,000 shares in Ghana Commercial Bank. The margin requirement has been given as 60%. A. How much can Miss V borrow from her broker? B. If Miss V has to pay commissions of GHS 2000, what will be the profit/loss and the return on the capital she invested if the stock price increases to GHS 8 in a year's time? What about if the stock falls to GHS 2.22 per share? C. Assuming Miss V decided not to take the loan but to invest only with her savings, if she pays a commission of GHS 2,000, what will be her profit/loss and return on the capital she invested if the stock price increases to GHS 8 in a year's time? What about if the stock falls to GHS 2.22 per share?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter8: Property Transactions: Capital Gains And Losses, Section 1231 And Recapture Provisions
Section: Chapter Questions
Problem 17P
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