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You short 1 0 0 shares of TEMA stock when it is selling at $ 1 0 0 . Your broker for this transaction imposes
You short shares of TEMA stock when it is selling at $ Your broker for this transaction imposes an initial margin requirement is You have cash to put down only of the short sale value. Your broker lets you borrow the remaining due to past relationship between the two firms. The commission on the sale is of transaction amount. Your brokers maintenance margin is
a At what price of stock will you receive a margin call from your broker?
b TEMA shares rose to as much as$ per share due to a good news announced by management. How much additional money must you deposit to bring the current margin to your brokers maintenance margin?
c You decide to buy back shares at $ to cover your short position at the end of one year. What is the ROIC for this transaction? You pay a commission of again on closing. While you are short, TEMA paid a $ per share dividend. Your broker charges a percent interest rate.
please show work and explain
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