Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sara Sanders purchased 30 shares of Apple stock at $190.17 per share using the prevailing minimum initial margin requirement of 50%. She hold the stock

image text in transcribed
Sara Sanders purchased 30 shares of Apple stock at $190.17 per share using the prevailing minimum initial margin requirement of 50%. She hold the stock for exact 4 months and sold without any brokerage costs at the end of that period During the 4-month holding period, the stock paid $1.42 per share in cash dividends. Sara was charged 58% annual interest on the margin loan. The minimum maintenance marginwas 25% a Calculate the initial value of the transaction, the debit balance and the quilty position on Sara's transaction b. For each of the following share prices, calculate the actual margin percentage, and indicate whether Sara's margin account would have excess equity, would be restricted or would be subject to a marginal (1) $17557 (2) $207.93, and (3) $121.43 Calculate the dollar amount of (1) dividends received and (2) interest paid on the margin toan during the 4-month holding period d. Use each of the following sale prices at the end of the 4-month holding period to calculate Sara's annualized rate of return on the Apple stocksaction (1) $184.16, C2) 5195.88, and (3) 5206.95 2. The innat value of the transaction is $. Round to the nearest cent) The debit balance in s (Round to the nearest cent.) The equity position is (Round to the nearest cont.) b. (1) the share price fails to $175.57, the actual margin percentage will be (Round to I decimal places) The account in this case (select from the drop-down menu 2) the share price rises to $20783, the actual margin percentage will be ). (Round to two decimal places) The account in unt in this cam (Select from the drop down menu) the share price fails to $12149, the actual margin percentage will be ) (Round to two decimal places) The account in this case (Select from the crop-down menu) wwww inaach of the answer boxes

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

Recommended Textbook for

Financial Accounting an introduction to concepts, methods and uses

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

13th Edition

978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003

Students also viewed these Accounting questions

Question

What are the APPROACHES TO HRM?

Answered: 1 week ago

Question

What do you mean by dual mode operation?

Answered: 1 week ago

Question

Explain the difference between `==` and `===` in JavaScript.

Answered: 1 week ago