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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 -121.60% $20.00 -58.80%
6 Initial Stock Price $50.00 Enter data 25.00 -101.60% 25.00 -48.80%
7 Shares Purchased 400 (B4/B10)/B6 30.00 -81.60% 30.00 -38.80%
8 Ending Stock Price $40.00 Enter data 35.00 -61.60% 35.00 -28.80%
9 Cash Dividends During Hold Per. $0.60 Enter data 40.00 -41.60% 40.00 -18.80%
10 Initial Margin Percentage 50.00% Enter data 45.00 -21.60% 45.00 -8.80%
11 Maintenance Margin Percentage 30.00% Enter data 50.00 -1.60% 50.00 1.20%
12 55.00 18.40% 55.00 11.20%
13 Rate on Margin Loan 8.00% Enter data 60.00 38.40% 60.00 21.20%
14 Holding Period in Months 6 Enter data 65.00 58.40% 65.00 31.20%
15 70.00 78.40% 70.00 41.20%
16 Return on Investment 75.00 98.40% 75.00 51.20%
17 Capital Gain on Stock -$4,000.00 B7*(B8-B6) 80.00 118.40% 80.00 61.20%
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
A B C D E F G H
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 -121.60% $20.00 -58.80%
6 Initial Stock Price $50.00 Enter data 25.00 -101.60% 25.00 -48.80%
7 Shares Purchased 400 (B4/B10)/B6 30.00 -81.60% 30.00 -38.80%
8 Ending Stock Price $40.00 Enter data 35.00 -61.60% 35.00 -28.80%
9 Cash Dividends During Hold Per. $0.60 Enter data 40.00 -41.60% 40.00 -18.80%
10 Initial Margin Percentage 50.00% Enter data 45.00 -21.60% 45.00 -8.80%
11 Maintenance Margin Percentage 30.00% Enter data 50.00 -1.60% 50.00 1.20%
12 55.00 18.40% 55.00 11.20%
13 Rate on Margin Loan 8.00% Enter data 60.00 38.40% 60.00 21.20%
14 Holding Period in Months 6 Enter data 65.00 58.40% 65.00 31.20%
15 70.00 78.40% 70.00 41.20%
16 Return on Investment 75.00 98.40% 75.00 51.20%
17 Capital Gain on Stock -$4,000.00 B7*(B8-B6) 80.00 118.40% 80.00 61.20%
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
B4: Enter initial
investment
(in dollars)