What share price is there a margin call

Assignment Help Financial Management
Reference no: EM131304613

A trader buys 100 shares of a stock on margin. The price of the stock is $30. The initial margin is 60% and the maintenance margin is 40%. How much money does the trader have to provide initially? For what share price is there a margin call.

Reference no: EM131304613

Questions Cloud

What is the bonds current yield and yield to maturity : A bond matures in 12 years and pays an 8 percent coupon rate paid semi-annually. The bond has a face value of $1,000, and currently sells for $$1310. What is the bond’s current yield and yield to maturity? If rates on bonds of similar risk and maturi..
Perpetuity with annually compounded discount rate : In 30 years, Andy plans on setting up a fellowship fund for his wife's school that pays out $100, 000 per year in perpetuity with an annually compounded discount rate of 5%. In order to set up the fund in 30 years, how much does Andy need to save eac..
Maximum acceptable payback period : Nova Products has a 6 year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternatives. Based on their payback? periods, which machine should the firm? accept? First, second or nei..
The fund and expects to have cash inflows : Monty has been hired to run a pension fund for Dasdin Company Limited, a small manufacturing firm. The firm currently has 5 million in the fund and expects to have cash inflows of $2 million a year for the first 5 years followed by cash outflows of $..
What share price is there a margin call : A trader buys 100 shares of a stock on margin. The price of the stock is $30. The initial margin is 60% and the maintenance margin is 40%. How much money does the trader have to provide initially? For what share price is there a margin call.
Ten-year fixed-rate investments : A company’s investments earn LIBOR minus 0.60%. Explain how it can use the quotes in Table 5.5 to convert them to (a) three-, (b) five-, and (c) ten-year fixed-rate investments.
Cash budgeting-implications of failure to finance adequately : Analyse the costs of different sources of finance by analying the tangible and intangible costs of different sources of finance-Tax effect & tangible costs of finance-like interest,dividends;opportunity costs. Explain the importance of financial plan..
Firm has maximum acceptable payback period : Jordan Enterprises is considering a capital expenditure that requires an initial investment of $ 63,000 and returns after tax cash inflows $13,246 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. Should the company ..
Retirement planing : You just turned 25 years old and want to retire when you turn 65. You expect to live for 25 years after retirement and want to withdraw $50,000 per year in retirement, starting on your 65th birthday. You expect to earn a return of 5% on your investme..

Reviews

Write a Review

Financial Management Questions & Answers

  Goal is to create portfolio with expected return

You have $18,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 16 percent and Stock Y with an expected return of 11 percent. Assume your goal is to create a portfolio with an expected return of 12.10 percent. Req..

  Bond years to maturity yield to maturity

Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity Yield to Maturity

  This will be an annuity of cash flows

What is the present value of $2,525 per year, at a discount rate of 8%, if the first payment is received 6 years from now and the last payment is received 27 years from now? No cash flows will be received for the first 6 years. This will be an annuit..

  What factors cause a contraction in commercial paper market

What factors contribute to an expansion of the commercial paper market? - What factors cause a contraction in the commercial paper market?

  Implied annual interest rate inherent in futures contract

Red Buckle Inns plans to issue $85,000,000 of 20-year semi-annual bonds in January to help finance an expansion including 120 new hotels. It is now September, and the current cost of debt to the company is 9 percent. What is the implied annual intere..

  Return and the interest is compounded daily

You are saving for your child's education since you did not participate in the Texas Tomorrow Fund. Your child is turned one today. Starting next quarter, you will deposit $500 every quarter until you child turns 17. Your last payment will be on his ..

  Maintain without resorting to additional equity issues

An all-equity-financed firm plans to grow at an annual rate of at least 27%. Its return on equity is 42%. What is the maximum possible dividend payout rate the firm can maintain without resorting to additional equity issues?

  What is its dollar price assuming par value-quoted price

A noncallable Treasury bond has a quoted yield of 4.63 percent. It has a 5.6 percent coupon and 10 years to maturity. What is its dollar price assuming a $1,000 par value?

  The projects involve unrelated new product lines

Project Sigma requires an investment of $1 million and has a NPV of $10. Project Delta requires an investment of $500,000 and has a NPV of $150,000. The projects involve unrelated new product lines.

  Discusses the role of greed for gain

St. Thomas Aquinas discusses the role of “greed for gain, which knows no limit and tends to infinity.” Michael Norton discusses the role of money in society and how it can make people happier. As a society, how can we minimize the “greed for gain” wh..

  Capital budgeting and investment analysis

Who will benefit most from the machine if the technology underlying the machine is not proprietary and what are some of the things the manufacturer can do to earn higher returns from this machine even without patent protection?

  Discuss pros-cons of capitalizing leases-related assets

One advantage of leasing voiced in the past is that it kept liabilities off the balance sheet, thus making it possible for a firm to obtain more leverage than it otherwise could have. This raised the question of whether or not both the lease obligati..

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