What share price will you receive a margin call

Assignment Help Financial Management
Reference no: EM13874584

You open a brokerage account and purchase 200 shares of Google at $443.05 per share.  You borrow 40% from your broker to help pay for the purchase.  The interest rate on the loan is 8%.  Assume the day after your stock purchase, Google announces abysmal quarterly earnings.  If the maintenance margin requirement is 30%, at what share price will you receive a margin call?

Reference no: EM13874584

Questions Cloud

What is the cost of leasing : Waldrop Corporation must install $200 of new equipment in its Ohio plant. It can obtain a bank loan for 100% of the required amount at 8% interest on the loan. Alternatively, the firm can leas the equipment on a 2-year lease, the payment would be $11..
What is the required expected return for biopharma according : Biopharma is a pharmaceutical company. Biopharma’s annual stock returns have a CAPM beta of 1.25 (i.e. β =1.25). The market portfolio’s return is 13%, and the risk free rate is 5%. a. What is the required expected return for Biopharma according to th..
Share initial margin requirement : You open a brokerage account on January 1 and sell short 500 shares of Apple Computer at $163.39 per share. The initial margin requirement is 50%. Assume that Apple pays an annual dividend on December 31 of $5.50 per share. What is the margin balance..
What stock price will you receive a margin call : You open a brokerage account on January 1 and sell short 500 shares of Apple Computer at $163.39 per share. The initial margin requirement is 50%. The maintenance margin is 30%. Disregarding interest and dividends, at what stock price will you receiv..
What share price will you receive a margin call : You open a brokerage account and purchase 200 shares of Google at $443.05 per share.  You borrow 40% from your broker to help pay for the purchase.  The interest rate on the loan is 8%.  Assume the day after your stock purchase, Google announces abys..
What is the initial margin balance : You open a brokerage account and purchase 200 shares of Google at $443.05 per share. You borrow 40% from your broker to help pay for the purchase. The interest rate on the loan is 8%.  What is the initial margin balance?
What is the initial loan amount in your account : You open a brokerage account and purchase 200 shares of Google at $443.05 per share. You borrow 40% from your broker to help pay for the purchase. The interest rate on the loan is 8%. What is the initial loan amount in your account?
Create a linear program : Create a linear program that shows exactly how many circuit boards should be produced at each plant and then shipped to each warehouse in order to maximize resulting profits. Your completed model should show the optimal values of all 12 decision vari..
Research essay on social conformity protects : Research essay on social conformity protects public health. Do you agree?

Reviews

Write a Review

Financial Management Questions & Answers

  Best estimate of the firms cost of equity

If a firm has a beta of 90% and a market risk premium of 7% and T-bills yield 3.5%. The most recent dividend was $1.80 per share and dividends are expected to grow at a 5% annual rate indefinitely. If the stock sells for 47% per share, what is your b..

  Look for the balance amount due to be paid by bank

you have taken a loan of 320000 from a bank for the 5 years at the prevailing rate of 3.75% , Calculate the annual instalment you are liable to pay to the bank and create a loan amortization table for a quick access to the principle and interest paid..

  Calculate after tax cost of debt expressed as percentage

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semi annual interest payments. Bond A has a coupon rate..

  A bond pays semi-annual coupon payments

A bond pays semi-annual coupon payments of $30 each. It matures in 20 years and is selling for $1,200. What is the firm’s cost of debt if the bond’s par value is $1,000?  In the Capital Asset Pricing Model, the market risk premium is estimated over a..

  Reduce the retail value of the physical inventory to cost

Fuentes Company operates a large discount store and uses the retail method to estimate the cost of ending inventory. Management suspects that in recent weeks there have been unusually heavy losses from shoplifting or employee pilfer- age. Using the r..

  What are the positive and negative treads for truvia

Have you ever heard of Truvia? What are the competitors to Truvia? Is Stevia just a fad or a long term product? What are the positive and negative treads for Truvia?

  Financial advisors each year to earn return

Billions of dollars are paid to financial advisors each year to earn a return that is superior to what an individual could earn on his or her own. John Bogle started the Vanguard Company and the first index mutual fund. Please discuss what index fund..

  What is the firms net income

Assume that Wiley Health System, a for-profit hospital, has $1,000,000 in taxable income for 2015, and its tax rate is 30 percent. What is the firm's net income?

  Calculate the expected rate on year treasury bond

The Wall Street Journal reports that the current rate on 5-year Treasury bonds is 2.45 percent and on 10-year Treasury bonds is 4.55 percent. Assume that the maturity risk premium is zero. Calculate the expected rate on a 5-year Treasury bond purchas..

  Discuss the following topicdoes purchasing power parity ppp

discuss the following topicdoes purchasing power parity ppp eliminate concerns about long-term exchange rate risk? one

  Identify the web site the sender and perceived

find a web site that has an ldquoabout usrdquo section or a ldquopress releaserdquo section. write a three to four 3-4

  What is the value of the investment

If you have an investment that pays you $4000 two years from today,$5000 three years from today, and $6000 four years today. What is the value of the investment today if the appropriate interest rate 6% per year compounded annually?

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