Withdrawn from the margin account

Assignment Help Financial Management

Reference no: EM131300379

A company enters into a short futures contract to sell 4,000 bushels of wheat for 150 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call? Under what circumstances could $1,500 be withdrawn from the margin account?

Show ALL work.

Reference no: EM131300379

Questions Cloud

Nonconstant growth and quarterly dividends : Pasqually Mineral Water, Inc., will pay a quarterly dividend per share of $1.70 at the end of each of the next 12 quarters. Thereafter, the dividend will grow at a quarterly rate of 1.8 percent, forever. The appropriate rate of return on the stock is..

The firms shares on the ex-dividend date : Texas Utilities pays a quarterly dividend of $0.77. Assume that the stock is trading at $35 per share, and that tomorrow is the ex-dividend date. Based on the past behavior of the firm’s shares on the ex-dividend date, you believe that the drop in th..

Compute the year-end balance of retained earnings : Benz & Jerry, Inc., showed retained earnings of $600,000 at the beginning of the fiscal year, January 01, 2015. During the year ended December 31, 2015, the company generated net income after taxes of $980,000 and paid out 42 percent of its net incom..

Cash flow from operating activities generated : Jenn & Co., reported the following information at its last shareholders’ meeting: Ali Royal Company generated the following numbers last quarter. What is the cash flow from operating activities generated last quarter by the firm?

Withdrawn from the margin account : A company enters into a short futures contract to sell 4,000 bushels of wheat for 150 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call? Under what circumstances could $..

Invests in ten year ordinary annuity for graduation present : Danielle Salomon invests in a 10-year ordinary annuity for a graduation present. She contacts her bank and tells them to open an account and automatically deposit $500 at the end of each of the first 5 years, and $1000 at the end of each of the remai..

What is the npv of the proposal and should it be undertaken : Corregin Ind. is trying to analyze it capital structure and the various cost components therein. Various inputs include the risk free rate which is 2.8%, ß for the firm is .97, and the expected return on the market is 10.65%. Corregin is faced with a..

Raise the normal interest rate by open market operations : Suppose the Fed Wants to raise the normal interest rate by open market operations, changing the reserve requirement, or changing the discount rate. Draw a graph of the money market to show how the Fed's action translates into a high nominal interest ..

Totally offset the capital budgeting decision : As a manager, what are some challenges you anticipate in computing the WACC? Do you agree or disagree with the following statement: Using an inaccurate WACC could totally offset the capital budgeting decision. Fully explain and support your discussio..

User Account

All Pages