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

  Discuss the four exchange rates forecasting methods

Market participants who use foreign exchange derivatives tend to take positions based on their expectations of future exchange rates. Portfolio managers of financial institutions may take positions in foreign exchange derivatives to hedge their expos..

  What is the length of the days sales in inventory

Scribble, Inc. has sales of $81,000 and cost of goods sold of $65,000. The firm had a beginning inventory of $11,000 and an ending inventory of $13,000. What is the length of the days' sales in inventory?

  If interest is paid annually-what is the bonds price

Bond Yields. A bond with face value $1,000 has a current yield of 6% and a coupon rate of 8%. (LO6-1) If interest is paid annually, what is the bond’s price? Is the bond’s yield to maturity more or less than 8%?

  Considering new three-year expansion project

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.79 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,110,000 in annual sale..

  Describe the dividend-discount model

The Dividend-Discount Model can be used to determine the value of a firm's equity-i.e., the current price of a share of stock. We will use this model to estimate the value of a share of your firm's stock and compare this estimate to the current ma..

  What would happen to the stocks required rate of return

A stock has a required return of 9%. The risk-free rate is 5% and the market risk premium is 3%. What is the stock's beta? If the market risk premium increased to 4%, what would happen to the stock's required rate of return? VeggieStrips has been gro..

  Compact fluorescent lamps-make financial sense

Compact fluorescent lamps (CFLs) have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent lightbulb costs $.46 and lasts for 1,000 hours. If you require a 11 percent return, at what cost per kilow..

  Downside of public announcement of such ratings

Would bank supervision be made easier if banks’ CAMELS ratings were made available publicly? What might be the downside of public announcement of such ratings?

  Find CSNs stock price using the FCFE method

CSN reported net income of $100 million last year. CSN expects net income to grow at 7% next year, at 5% in the following year, and then at a constant rate of 3.5% per year forever. CSN expects that its current ROE will remain constant forever. Find ..

  What is the internal rate of return for the proposal

The ABC Company has gathered the following information about the cash flows associated with a capital budgeting opportunity. The Project will cost $10,000,000 to implement, and has a three year estimated economic life. What are the annual net cash fl..

  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 ..

  Which stock should my sister add to her portfolio

Your sister is considering to add one additional stock to a three stock portfolio, to form a four stock portfolio. The three stocks currently held all have b=1.0, and they are perfectly positively correlated with the market. However, stock A's standa..

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