What share price will you receive a margin call

Assignment Help Financial Management
Reference no: EM131012143

The stock of Flop Industries is trading at $56. You feel the stock price will decline, so you short 650 shares at an initial margin of 60 percent. If the maintenance margin is 30 percent, at what share price will you receive a margin call? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Reference no: EM131012143

Questions Cloud

Determine the optimal replacement age of all tires or second : The tires that fail in a period are replaced in the same period. The company is currently considering two options. First, to determine the optimal replacement age (period) of all tires or second, replace tires as they fail.
Application of time value of money principles : Application of time value of money principles can help you make decisions on loan alternatives. This exercise requires you to compare three mortgage alternatives using various combinations and points. Points on a mortgage refer to a payment that is m..
The weighted-average cost of capital and company valuation : Define capital structure. What is the company cost of capital formula (WACC)? What is Hot Rocks Corp WACC if debt was 45% and equity was 55% of total liabilities and shareholders' equity with the expected return for debt of 8% and expected return for..
How fast is angle changing after the plane passes : Let θ be the angle that the line through the radar station and the plane makes with the horizontal. How fast is θ changing 12 min after the plane passes over the radar station?
What share price will you receive a margin call : The stock of Flop Industries is trading at $56. You feel the stock price will decline, so you short 650 shares at an initial margin of 60 percent. If the maintenance margin is 30 percent, at what share price will you receive a margin call?
Identify the degree and cardinalities of the relationship : A vendor builds multiple types of tablet computers. Each hs a type identification number and a name. The key specifications for each type include amount of storage and display type.
Using the payback period to evaluate an investment : All companies have a cost of capital and you do as well on a personal level. From a personal perspective, what do you believe is an acceptable cost of capital? How are you basing answer or what are you measuring it against? What are the disadvantages..
Show whether or not the inventor claim is possible : An inventor claims to have developed a Lenoir engine with an isentropic compression ratio of 8.00 to 1 that produces a combustion temperature of 1500.°C when the intake temperature is 20.0°C. Assuming k = 1.40 and that the engine operates on a col..
What were the holding period returns of your investment : You purchased 34 shares of common stocks from ABC Corp on Jan 1st, 2000 for $27.45 per share. You sold all the shares on Dec 31st, 2004 for $29.17 per share. ABC Corp distributed annual dividends of $0.05, $0.11, $0.13 per share on Dec 28th, 2000, De..

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign exchange assets

P.J. Chase Stanley Bank holds $82 million in foreign exchange assets and $73 million in foreign exchange liabilities. P.J. Chase Stanley also conducted foreign currency trading activity in which it bought $172 million in foreign exchange contracts an..

  Ordinary annuity for a graduation present

Danielle Salomon invests in a 10-year ordinary annuity for a graduation present. She contacts her bank and tells them to open an account and automatically deposit $500 at the end of the first 5 years, and $1000 at the end of the remaining 5 years.

  What is the projected breakeven volume

If the fixed cost of Boeings new aircraft the 797 is 8billion the average cost is 100000. the sales price is $140,000,000. What is the projected breakeven volume?

  Is it possible for a firm to have too much cash

Is it possible for a firm to have too much cash? Why would shareholders care if a firm accumulates large amounts of cash? What options are available to a firm if it believes it has too much cash? How about too little?

  A project that carries normal amount of risk

A project that carries a normal amount of risk and does not affect the risk exposure of the firm should be discounted back at the: Select one: a. coefficient of variation b. beta c. risk-free rate d. weighted average cost of capital

  What formula do you use to find the return

Find the return of an asset with the following information: initial price $32.65 final price $41.22 dividend $2.17? Also what formula do you use to find the return?

  Save for five years for down payment on house

An investor wants to save for five years for a down payment on a house. She deposits $200 per month into a savings account paying 7% compounded monthly. At the end of the five years, she places the balance of the savings account as a down payment on ..

  What is the Expeced EPS

GTB, Inc., has a 20 percent tax rate and has $53.00 million in assets, currently financed entirely with equity. Equity is worth $5 per share, and book value of equity is equal to market value of equity. The firm is considering switching to a 20-perce..

  What ytm do these bonds offer

Johanson VI Advisors. Issued $1000 par value bonds a few years ago with a coupon rate of 7 percent, paid semiannually. After the bonds were issued, interest’s rates fell. Now with three years remaining before they mature, the bonds sell for $1,055.08..

  Well-diversified portfolio-data for asset and the market

You have developed the following data for Asset “A” and the Market. Assume that the four states of nature include all possible states: State Return on Asset A Return on the Market 1 -15 -5 2 5 0 3 20 15 4 30 20 The rate on T-Bills is 2 percent. Given..

  Growing rapidly and has strong prospects

The company you cofounded last year is growing rapidly and has strong prospects for an IPO in the next year or two. The additional capital that an IPO could raise would let you hire the brightest people in the industry and continue to innovate with n..

  What terms of the balance sheet changed

Suppose that a company raises $900,000 million by issuing $600,000 of long term debt and sell common stock for $300,000. The funds raised are used to buy new machinery used in producing inventory. What terms of the balance sheet changed? Would shareh..

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