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solmaris [256]
3 years ago
13

You short sold 1,100 shares of stock at a price of $29 and an initial margin of 55 percent. If the maintenance margin is 40 perc

ent, at what share price will you receive a margin call? What is your account equity at this stock price?
Business
1 answer:
Margaret [11]3 years ago
6 0

Answer:

No of stock = 1100

Price of Stock = 29

Short sale = 31900

Initial Margin % = 55%

Initial Margin = 17545

Total value = 49445

The earnings of the sale is 31900, which is deposited in our account for a total account value of $49,445 (31900+55%)

Maintenance Margin = 40%

Margin Call Value = 49445/ (1+0.4)

Margin Call Value = 35317.86

Price per share = 35317.86 / 1100  

Price per share = 32.11

So a margin call will be triggered when the price of the shorted security rises to $32.11

Margin Call Price = 32.11

Account Equity = 32.11*1100

Account Equity = 35318

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This year, Mesa Inc.’s before-tax income was $11,252,000. It paid $529,000 income tax to Minnesota and $451,000 income tax to Il
Sever21 [200]

Answer:

Before-tax income                                                                   $ 11,252,000

Less: Deduction for state income tax(529000+451000)   $      980,000

Taxable Income                                                                   $   10,272,500

Tax rate                                                                                                        21%

Federal income tax                                                           $   2,157,225.00

Mesa’s combined tax rate

= ([$980,000 state tax + $2,157,225 federal tax] ÷ $11252000) 27.88%

Explanation:

6 0
3 years ago
Concord uses the periodic inventory system. For the current month, the beginning inventory consisted of 7400 units that cost $10
Mars2501 [29]

Answer:

$109,250

Explanation:

FIFO assumes that the units to arrive first, will be sold first. Therefore, inventory valuation is based on later or recent prices.

Step 1 : units in ending inventory

Ending Inventory =  units available for sale - units sold

                             =  9,500

Step 2 : inventory value

Ending Inventory = 9,500 x $11.50 = $109,250

8 0
3 years ago
Consumers are buying _______________ goods when they switch between brands of convenience goods out of boredom or the desire to
suter [353]

Answer:

Variety-seeking.

Explanation:

Consumers are buying variety-seeking goods when they switch between brands of convenience goods out of boredom or the desire to change. Purchases may have been pre-planned in that consumers "knew" they were going to purchase a specific product or brand but changed their minds in-store, deciding to try something different. Variety-seeking behavior is depicted by the consumers when they have very low involvement with in the buying process and there are significant differences are also present among brands. Consumers do lot of brand switching here. Consumers switch brands only for the sake of trying something new rather than dissatisfaction with the brand.

7 0
3 years ago
What is the term for when people fail to reach a mutually beneficial equilibrium because they lack a way to synchronize their ac
kobusy [5.1K]

Answer:

A coordination failure.

Explanation:

A coordination failure is the term used for describing a situation when two or more people fail to reach a mutually beneficial equilibrium because they lack a way to synchronize their actions. Thus, a coordination failure simply occurs when two or more people or businesses are lacking coordination in their actions and as a result are unable to reach a mutually beneficial equilibrium or compromise.

7 0
3 years ago
Which of the following situation would make transaction costs too high to negotiate and therefore the Coase Theorem would not ap
Rama09 [41]

Answer: The correct answer is "c. Many people are bothered by pollution in the area".

Explanation: The Coase Theorem points out that if property rights are well defined and transaction costs are zero, the negotiation between the parties will lead us to an optimal point of allocation in the market.

Whoever keeps the right will depend on the value of what each party produces and the costs of losing the right to property.

However, Coase's theorem ceases to be valid when there are high negotiation costs, for example between a company and thousands of inhabitants of an area (like in this case) or when property rights are not well defined (all parties believe they have the right to do what they want).

3 0
2 years ago
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