Question
You sold short 200 shares of a stock at $125 per share at the beginning of the year. The initial equity margin is 50%. a.)
You sold short 200 shares of a stock at $125 per share at the beginning of the year. The initial equity margin is 50%.
a.) At what stock price would you receive a margin call if the maintenance margin is 35%? (do not consider dividends in question a)
b.) Assume that the stock paid a $0.40 dividend per share each quarter, what is the rate of return if you buy to cover the shares at $110 per share at the end of the year?
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Restaurant Financial Management
Authors: Hyung-il Jung
1st Edition
1774631431, 978-1774631430
