What is the percentage margin on the above transaction

Assignment Help Financial Management

Reference no: EM131178043

You've borrowed $23,500 on margin to buy shares in Disney, which is now selling at $47 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 $41.00 per share.

How low can the price of Disney shares fall before you receive a margin call?

Reference no: EM131178043

Questions Cloud

How many kronas would a dollar buy tomorrow : Suppose that 1 Swedish krona could be purchased in the foreign exchange market today for $0.42. If the krona appreciated 7% tomorrow against the dollar, how many kronas would a dollar buy tomorrow? Round your answer to 2 decimal places. Do not round ..

Calculate any profit measures deemed necessary : Using the Moon Company’s annual report, calculate any profit measures deemed necessary and discuss the implications of the profitability of the company.

Payoffs have been equalized and riskless hedged investments : Madeline Manufacturing Inc.’s current stock price is $45 per share. Call options for this stock exist that permit the holder to purchase one share at an exercise price of $35. These options will expire at the end of 1 year, at which time Madeline’s s..

Securities in which the fund invests increase in value : You purchased 2,000 shares of the New Fund at a price of $12 per share at the beginning of the year. You paid a front-end load of 4%. The securities in which the fund invests increase in value by 12% during the year. The fund's expense ratio is 2.2%...

What is the percentage margin on the above transaction : You've borrowed $23,500 on margin to buy shares in Disney, which is now selling at $47 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. What is the percentage margin on the above transaction. How..

When determining incremental cash flows for new project : Which of the following is not considered a relevant cash flow when determining incremental cash flows for a new project? Which of the following statements about payback (payback period) is most correct? Which of the following statements about capital..

Financial transaction involving two financial institutions : Financial Intermediation Look in a business periodical for news about a recent financial transaction involving two financial institutions. For this transaction, determine the following: How will each institution's balance sheet be affected? Will eith..

What are the yield to maturity and yield to call of call : What are the yield to maturity and the yield to call of a 20 year, 8% bond that is selling for $1150 has a call value of $1100 in year 6? Which will the investor make? We buy a 15 year, 10% bond yielding 9%. We sell it after 4 years when market rates..

What is the growth rate and current value : The common stock for Jason's Enterprises is expected to pay $1.95 in dividends next year. what is the growth rate? what is the current value of jason's stock?

User Account

All Pages