Find how many shares would have to sell to get back

Assignment Help Financial Accounting
Reference no: EM132765093

You have borrowed $30,000 on margin to buy shares in a listed company, which is now selling at $40 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price falls to 35 per share.

Problem a) Will you receive a margin call?

Problem b) How low can the price of the shares fall before you receive a margin call?

Problem c) If you do not want to invest more money, how many shares would you have to sell to get back to the initial margin debt level if the share price suddenly drops to $28?

Reference no: EM132765093

Questions Cloud

Are any issues or concerns from an ethical perspective : Are there any issues or concerns from a financial reporting perspective? Are there any issues or concerns from an ethical perspective?
What kinds of jobs are needed in organization : What kinds of jobs are needed in an organization? How has specialization of labor, or division of labor, been implemented in an organization
Should still measure satisfaction with the website bearing : Should still measure "Satisfaction with the Website" bearing in mind that will measure information quality, system quality, interactivity
What are the characteristic of a lease : he lease will be a financial one and a payout figure of $8,240 will be required at the end of 5 years. What are the characteristic of a lease
Find how many shares would have to sell to get back : Find how many shares would you have to sell to get back to the initial margin debt level if the share price suddenly drops to $28?
Forcing health care workers to get vaccination : How does this request become law? How are ethical concerns handled when making decisions such as forcing health care workers to get a vaccination?
Compute basic and diluted eps for the year ended december : Net income was $1,200,000. The tax rate for the year was 35%. Compute basic and diluted EPS for the year ended December
Ways to improve healthcare outcomes : Ways to improve healthcare outcomes and reduce cost through new technology. Concentration on profit margins
What is the current value of the bond for abc coprration : In response to the revaluation, the required nominal rate on this debt has now risen by an additional 8 %. What is the current value of this bond?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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