Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

15. Great Bear Traders are bearish on the Energy Innovations stock. They short sell 10,000 shares at the $370 per share price. The stock will

15. Great Bear Traders are bearish on the Energy Innovations stock. They short sell 10,000 shares at the $370 per share price. The stock will pay a $5 dividend this year. The initial margin requirement is 60%, while the maintenance margin on short sales is 35%. If the stock rallies, how high can it go in one year before a margin call is made?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions