Answer:
The price at which a margin call would be received is $28.929.
Explanation:
The stated question does not contain complete information. The remaining information is as follows.
<em>Assume that you purchase 150 shares of RossCorp stock at $45 each by making a margin deposit of 55 percent. At what price would you receive a margin call?</em>
The price is calculated using the formula for maintenance margin as follows.
Maintenance margin = Equity in account / Value of stock
Equity in account = (Shares purchased x Call price) - (Shares purchased x Remaining ratio x Sale price)
Equity in account = (150 x P) - (150 x 0.45 x 45)
= 150P - 3037.5
Value of stock = Shares purchased x Call price
= 150P
Inserting these values into the formula for maintenance margin:
0.3 = (150P - 3037.5) / 150P
45P = 150P - 3037.5
105P = 3037.5
P = 28.929
Hence, the price at which a margin call would be received is $28.929.
Answer:
Worse than: nonsation
Explanation:
Indifference Curve is a type of curve that depicts all possible combinations of goods that gives the same satisfaction to consumer with the same as well as the same utility.
Indifference curves are also convex to the origin. That is they are bowed inward toward the origin.
Answer:
business involvement
Explanation:
One of the things that a limited liability partner has that a limited partner does not have in a limited partnership is business involvement. Limited Liability partners are involved in business decisions and tasks. This is because they (along with the other liability partners) take responsibility for the debts and losses that the company acquires. Therefore since it affects them, they take part in the decision making process.
Answer:
The value of the Share of Zeke after the new Expansion is $25.
Explanation:
As there was no growth in the dividend before change, Price of the share from a stable dividend payment can be calculated by following formula.
Price = Dividend / Required rate of return
As we have the share price and the dividend amount we need to calculate the required rate of return.
Required rate of return = Dividend / Price
Placing value in the formula
Required rate of return = $2.50 / $25.00 = 0.1 = 10%
After New Expansion
Dividend = $1.50
Growth rate = 4%
The share price can be calculated by the dividend growth formula, as follow
Price of share = Dividend / (Rate of return - growth rate)
Price of share = $1.50 / (10% - 4%)
Price of share = $1.50 / 6%
Price of share = $25
Retained profits have several major advantages: They are cheap (though not free) – effectively the "cost of capital" of retained profits is the opportunity cost for shareholders of leaving profits in the business (i.e. the return they could have obtained elsewhere)
