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You sell short 1,000 shares of XYZ Inc. at $34/share. You cover your short when XYZ hits $32.50/share. Assume XYZ pays a dividend of $2.20/share
You sell short 1,000 shares of XYZ Inc. at $34/share. You cover your short when XYZ hits $32.50/share. Assume XYZ pays a dividend of $2.20/share during the time your short sale is outstanding. What dollar amount of profit do you earn? Please explain!
A) $3,700
B) $1,500
C) $0
D) -$700
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