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expeople1 [14]
3 years ago
12

Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2% for purchases and 2% for sales. The interes

t rate on margin debt is 6.25% per year. The maintenance margin is 30
Business
1 answer:
maksim [4K]3 years ago
6 0

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.

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Explanation:

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4 years ago
Collier/Evans defines servicescape as "all the physical evidence a customer might use to form an impression."
Slav-nsk [51]

Answer:

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Explanation:

The serviescape of a business includes the business appereance, layout, structure, signage, and equipment.

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7 0
3 years ago
What is in dynamic equilibrium ??????? I need it for my physical education exam​
choli [55]

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Explanation:

8 0
3 years ago
If the absolute value of the own price elasticity of demand is greater than 1, then demand is said to be:
OLEGan [10]

Answer:

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Explanation:

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I hope my answer helps you.

8 0
3 years ago
Describe the final step in the adjusting process. The final step is to determine the correct balance of an account. The final st
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Answer:

The Final Step is 'post to a trial balance so financial statements can be prepared'

Explanation:

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3 years ago
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