Bob Orleans invested $3,000 and borrowed $3,000 to purchase shares in Verizon Communications. At the time of his investment, Verizon was selling for $60 a share.
a. If Bob paid a commission of $20, how many shares could he buy if he used only his own money and did not use margin?
b. If Bob paid a commission of $40, how many shares could he buy if he used his $3,000 and borrowed $3,000 on margin to buy Verizon stock?
c. Assume Bob did use margin to buy his Verizon stock. Also, assume he paid another $40 to sell his stock and sold the stock for $64 a share. How much profit did he make on his Verizon stock investment?