Compute the return on investment

Assignment Help Accounting Basics
Reference no: EM133158448

Question - You have borrowed $26,000 on margin to buy shares in Bubble Dot Company, which is now selling at $50 per share. Your account starts at the initial margin requirement of 60%. The maintenance margin is 35%. Two days later, the stock price falls to $47 per share. The margin account does not charge any interest.

(a) Compute the return on investment?

(b) Will you receive margin call?

(c) How low can the price of Bubble Dot Company shares fall before you receive a margin call?

Reference no: EM133158448

Questions Cloud

Clash of the cultures: the case of newell rubbermaid : Using Case Study "Clash of the Cultures: The Case of Newell Rubbermaid", 15.7, answer the following questions:
Define transferable skills : Identify the transferable skills a payroll manager possesses
Can you make any abnormal profit by trading the shares : The next trade takes place at 10.45 am at $2 per share. Can you make any abnormal profit by trading the shares of Gold & Copper Ltd.
Power in organizations for a long time : Experts have studied power in organizations for a long time. They mostly agree on five core sources of power as well as various contingencies that support or in
Compute the return on investment : Your account starts at the initial margin requirement of 60%. The maintenance margin is 35%. Compute the return on investment
Complementary and alternative medical treatment : What is the difference between complementary and alternative medical treatment, and how comfortable would you be with a physician who practices alternative heal
What are the monetary benefits of training program : a) What are the different kinds of cost involved in training program?
Strategic alliances and collaborative partnerships : What are the most common reasons companies enter into strategic alliances and collaborative partnerships? Why might a company that is eager to stake out a stron
Conduct sensitivity analysis to determine sensitivity of npv : Conduct sensitivity analysis to determine the sensitivity of NPV to changes in the sales price, variable costs per unit, and the number of units sold

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much of this amount can green deduct

If Green pays total wages of $140,000 to its employees during the year, how much of this amount can Green deduct

  Calculate the unit manufacturing cost of the us and eu

wedig diagnostics manufactures two lasers photometer that are used in preparing dnas. the us model is designed for use

  What is the accumulated depreciation of disposed property

Please consider the excerpts from the Clorox Annual Report for Fiscal Year 2020 (PDF) (i.e., the fiscal year ended June 30, 2020) and answer the following.

  Calculate any passive investment income penalty tax payable

Dews, Inc., an S corporation in Norfolk, Virginia, has revenues of $700,000, Calculate any passive investment income penalty tax payable by this corporation

  What are some ways that companies dispose of assets what

what are some ways that companies dispose of assets? what are some reasons that companies dispose of

  How much is the cash flow from operating activities

How much is the cash flow from operating activities on the cash flow statement using the indirect method

  Determine total payroll tax expense for baltimore company

Barbara is an employee of Baltimore Company. Baltimore Company pays employees the Friday after the wages are earned. Overtime in excess of 40 hours must be paid

  What value should the land be recorded in gallatin repair

What value should the land be recorded in Gallatin Repair Service's records? On June 25, Gallatin Repair Service extended an offer of $96,000 for land

  Balance sheet accounts problem

The trial balance of Fink Company includes the following balance sheet accounts. Identify the accounts that might require adjustment. For each account that requires adjustment, indicate

  Discuss total current assets

Credit card receivables, assuming current assets consisted only of cash, credit card receivables, and inventories

  What is the net present value of this investment

Fabiano Brothers Co. is considering an investment that requires immediate payment of $550,000 and provides expected cash inflows of $100,000 annually for eight.

  What is Thomas adjusted basis after the casualty

The FMV before the accident is $18,000 and the FMV after is just $950. If the insurance recovery is $16,000, what is Thomas's adjusted basis after the casualty

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd