Question
Instructions show Essential Car Parts Inc. has a common share market price of$35. The company has 50 million shares outstanding, no preferred shares, and last
Instructions show Essential Car Parts Inc. has a common share market price of$35. The company has 50 million shares outstanding, no preferred shares, and last year had a net income after tax (NIAT) of$220million. They have a total book value of$1,100milion. Required: An investor opens a margin account at their brokerage firm. They wish to purchase 2,000 shares of Essential Car Parts Inc, at the curren common share market price. Their initial margin rate is30%. Caiculate the amount of equity they must provide and the amount of the loan.
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Financial Accounting in an Economic Context
Authors: Jamie Pratt
10th edition
978-1-119-3061, 1119306167, 978-1119444367
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