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MakcuM [25]
2 years ago
15

You purchased 100 shares of ABC common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance ma

rgin is 30%. Below what stock price level would you get a margin call
Business
1 answer:
Zina [86]2 years ago
6 0

A margin call would be issued if the stock price fell below $42.86.

Given initial margin 50% and maintenance margin 30%.

To find the stock price level to get a margin call.

When the value of assets in a brokerage account falls below a specific amount, known as the maintenance margin, the account holder is required to deposit extra cash or securities to fulfil the margin obligations. A margin call is a demand from a brokerage firm to boost the account's equity.

The formula to compute the margin call price is given below:

Margin call = \frac{1-Initial Margin}{1-Manitenance margin} * Purchase price

= \frac{1-0.50}{1-0.30} *60\\

=\frac{0.50}{0.70} *60\\=42.86

Therefore, the answer is $42.86.

To know more about margin call click here:

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Diplomacy best describes Jeremy’s ability to interact with his co-workers.
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Knowledge Check 01 Addison Corporation is considering the purchase of equipment that would increase sales revenues by $250,000 p
Flauer [41]

Answer:

C. 25.5%

Explanation:

Net operating cashflow = (250,000 - 100,000) = 150,000; This is a recurring cashflow; the PMT

Cost of equipment; the PV = 400,000

Next, calculate the rate of return  using Net operating cashflow per year and the equipment cost. You can do this with a financial calculator;

N =5

PMT = 150,000

FV = 0

PV = -400,000

then CPT I/Y = 25.41%

Therefore the return is closest to 25.5%

8 0
3 years ago
a seller transfers title to a buyer with a general warranty deed. in which clause of the deed does the seller define the quality
Elis [28]

A seller transfers title to a buyer with a general warranty deed. The seller defines the quality of ownership interest conveyed to the buyer in the habendum.

Habendum is an important concept in real estate and property transactions. It may also be used in other transactions related to leases and deeds, for example in the energy sector.

A habendum clause is part of a contract that is concerned with the rights, interests, and other features of ownership that is transferred to the other party. In cases of transfer of rights, for example in relation to a coal mine, it sets out the nature of the right and its duration.

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7 0
1 year ago
On time transport verified that it had a receipt showing that 2,000 air filtration units had been delivered to its warehouse. Wh
melisa1 [442]

The bill of lading is the type of receipt that provides information showing that 2,000 air filtration units had been delivered to its warehouse.

<h3>What is a bill of lading?</h3>

A carrier will issue a bill of lading to confirm receiving cargo for shipment. A bill of lading can be used for any sort of good transportation today, despite the fact that originally the phrase was exclusively used to refer to shipping. A contract, a receipt attesting to the carrier's receipt of the goods, and a document of title are all purposes served by the bill of loading.

Consequently, it is a document that goes with freight that outlines the agreement between the shipper and the carrier and sets down the rules that apply to their interaction when products are transported. It provides information about the shipment's cargo and transfers ownership of the shipment to the designated recipient party.

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7 0
1 year ago
Hickam Company makes one product, for which it has developed the following standard for labor: each unit should require 1.50 hou
Brut [27]

Answer:

$1.8 Unfavourable

Explanation:

Labor usage variance can be calculated by deducting Standard hours from Actual hours and multiplying the result by the standard rate.

DATA

Standard hours = 1.50 hours

Standard rate = $12/hour

Actual hours = 1.65 hours

Actual rate = $11.5/hour

Calculation

LABOUR USAGE VARIANCE = (SH-AH)SR

LABOUR USAGE VARIANCE =(1.5 - 1.65) x $12

LABOUR USAGE VARIANCE = (-0.15) x $12

LABOUR USAGE VARIANCE = $1.8 Unfavourable

7 0
3 years ago
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