What is the maximum percentage decline in the stock

Assignment Help Financial Management
Reference no: EM13871221

You decide to buy 1,500 shares of stock at a price of $62 and an initial margin of 80 percent. What is the maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 40 percent?

Reference no: EM13871221

Questions Cloud

Estimated salaries earned during the year : Estimated salaries earned during the year, including both what was paid and what was owed at year end: $ 265,000
How much can you withdraw each year in your retirement : You are planning your retirement in 10 years. You currently have $176,000 in a bond account and $616,000 in a stock account. You plan to add $6,400 per year at the end of each of the next 10 years to your bond account. How much can you withdraw each ..
The income statement shows net income : Fly Away, Inc., has balance sheet equity of $5.3 million. At the same time, the income statement shows net income of $763,200. The company paid dividends of $431,208 and has 120,000 shares of stock outstanding. If the benchmark PE ratio is 17, what i..
What two approaches can managers take : What two approaches can managers take to speed up sluggish collections of receivables? List one advantage and disadvantage for each approach.
What is the maximum percentage decline in the stock : You decide to buy 1,500 shares of stock at a price of $62 and an initial margin of 80 percent. What is the maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 40 percent?
What is the default risk premium on the corporate bond : A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 8.75%. Assume that the liquidity premium on the corporate bond is 0.3%. What is the default risk premium on the corporate bond? Round your answer to t..
Using the constant growth rate model : Using the constant growth rate model (and data from Bloomberg) shows that the present value of expected dividends for the next five years for McDonald’s is only about $1.98.  How can such a large discrepancy in the two dollar values on the same date ..
Dividends are growing at a constant rate : The last observed dividend for Company Z before today was $2.15. Dividends are growing at a constant rate of 8.5% annually. If the required rate of return on the stock is 12.5%, what will be the total expected dollar capital gain per share on the sto..
Deviation for comparing two risky stocks in isolation : When would the coefficient of variation be preferred over the standard deviation for comparing two risky stocks in isolation? Fully explain your answer.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the current selling price

A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)? Worked this many ways by many suggestions and I am not ..

  Earn an annual interest rate

If you have $675,000 saved for retirement how many years will it last if you earn an annual interest rate of 7% and withdraw $46,000 at the beginning of each year? Assume you won $60 million in the lottery. You were given the option of receiving twen..

  Working in a business to learn the ropes

You have a two children, A and B. Child A is not going to college but is working in a business to learn the ropes. Child A plans on opening a business someday. Child B is attending college. You put a certain amount of money into an account.

  Consider an option on a non-dividend-paying

Consider an option on a non-dividend-paying stock when the stock price is $107, the exercise price is $102, the risk-free interest rate is 5% per annum, the volatility is 25% per annum, and the time to maturity is four months.

  Leverage gives the illusion of higher returns

Explain, in your own words, when and how the composition of capital (the mix of debt and equity) does not affect the value of the firm and Discuss this statement: leverage gives the illusion of higher returns.

  Assume semi-annual compounding-purchased zero coupon bond

You purchased a zero coupon bond one year ago for $138.23. The market interest rate is now 7 percent. If the bond had 28 years to maturity when you originally purchased it, what was your total return for the past year? Assume semi-annual compounding.

  Calculating annuity future values

You are planning to make annual deposits of $6,330 into a retirement account that pays 10 percent interest compounded monthly. How large will your account balance be in 28 years?

  Summarize your findings from the articles in a two- to

summarize your findings from the articles in a two- to three-page paper excluding title and references pages. the paper

  Indirect effects on project cash flow1provide an example of

indirect effects on project cash flow1.provide an example of a sunk cost from your firm.2. provide an example of an

  What is the simple annual interest that is equivalent

You local bank quotes you an interest rate of 9% compounded monthly. If you deposit $100 today, what amount will your deposit grow to in three months? How about in one year? Suppose that the interest rate is now specified as 9% continuously compounde..

  Assume that the price of the house grows

Assume that the price of the house grows at 5.5% per year. How many years will it take for the house to reach $100 million in value? The current value of the house of $28 million.

  Explain why NPV is preferred over IRR

Explain why NPV is preferred over IRR if there is a conflict between the two methods in the selection of projects

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