You decide to sell 100 shares of Davis Industries short when it is selling at its yearly high of $35.Your broker tells you that your margin requirement is 55 percent and that the commission on thesale is $15. While you are short, Davis pays a $0.75 per share dividend. At the end of one year you buy your Davis shares (cover your short sale) at $30 and are charged a commission of $15and a 6 percent interest rate.

MV:100*35=3500

Margin: 55%

Your loan:3500*0.45=1575

Your equity: 3500-1575=1925

What is your dollar return on the investment?

Profit = $3500$3000$75$15$15(10.55)(3500)(0.06) = $300.50

Can someone explain where the $3000 came from in the answer for profit?