Further slowdown in economic growth

Assignment Help Financial Management
Reference no: EM131998699

You think that there will be a further slowdown in economic growth and you think that this will hit the retail industry. You take a closer look at Target, one of the largest retailers in the US. On Google finance you see that over the year-to-date return on Target stock is 14.5% while S&P has decreased by 14.8%. You call up your broker and ask her to short sell 200 shares of Target stock which is trading at 57. For collateral, you put up 6,000 in cash. You decide to hold the short position for 1 year and you expect Target to pay a dividend of 0.60 over this period. In one year Target is trading at 45- sales and net income declined at Target. Assume that the brokerage account pays no interest.

STEP BY STEP SHOW:

A) When you open your position, what is the margin of your account?

B) What is the return of your interest?

Reference no: EM131998699

Questions Cloud

Share your strongest and weakest competency : Share your strongest competency and your weakest competency, and comment on your general reaction to the findings of the assessment.
Evaluate the efficiency of common inventory control systems : Evaluate the efficiency of two common inventory control systems. Determine the ways in which they provide a firm with a competitive advantage in the marketplace
What theory of leadership most closely aligns : What theory of leadership most closely aligns with our current practice within our organization and do you think it is most appropriate or would another serve.
Exchange rate between the two countries : The domestic price of one bottle of rum in Trinidad is 15 Trinidadian dollars. According to PPP, what will the exchange rate between the two countries be?
Further slowdown in economic growth : You think that there will be a further slowdown in economic growth and you think that this will hit the retail industry.
Key facts about short-run economic fluctuations : Identify the three key facts about short-run economic fluctuations and how the economy in the short run differs from the economy in the long run.
How many times should you make this trade : How many times should you make this trade? How likely is it that your friend’s information is current and correct?
Dale buys stock bull with his half million bull : Dale buys stock “bull” with his half million “bull” currently sells for $45 per share.
What evidence will you use to inform your understanding : What evidence will you use to inform your understanding and strengthen your analysis? What will you tell Kate when you meet with her?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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