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Vanyuwa [196]
2 years ago
5

Old Economy Traders opened an account to short-sell 1,900 shares of Internet Dreams at $58 per share. The initial margin require

ment was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $58 to $60, and the stock has paid a dividend of $3.50 per share. a. What is the remaining margin in the account
Business
1 answer:
a_sh-v [17]2 years ago
7 0

Answer:

45.67%

Explanation:

Calculation to determine the remaining margin in the account

First step is to calculate the 1 year price

1 year price=1900 shares*$58 per share

1 year price = $110,200

Second step is to calculate the Equity

Margin requirement is 50% so equity = 50%*$110,200

Margin requirement is 50% so equity =$55,100

Third step is to calculate the 1 year later price increase of 60

1 year later price increase to 60

$1900 shares*$60 per share =114,000

Fourth step is to calculate the Dividend

Dividend =$3.50 *1900

Dividend=$6,650

Now let calculate the Margin

Margin = $55,100/($114,000+$6,650)

Margin =$55,100/$120,650

Margin= 45.67%

Therefore the remaining margin in the account is 45.67%

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Answer:

The answer is True.

Explanation:

From the description, it seems that World Extraction Corp is behaving in a socially responsible way – even though its stakeholders might not have the same view. Though in the long run, a company which behaves in socially responsible manner might accumulate enough goodwill from the society around it to be perceived with a good reputation, stakeholders who do not fit the company’s vision might end up being detrimental to the company’s business.  

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3 years ago
Occasionally, _________________ may lead to pure monopoly; in other market conditions, they may limit competition ______________
makvit [3.9K]

Occasionally, barriers to entry may lead to pure monopoly; in other market conditions, they may limit competition to a few oligopoly firms

<h3>Do barriers to entry exist in a pure monopoly?</h3>

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The four main elements of monopoly are: (1) a single business controlling the entire output of a market; (2) a distinctive product; (3) barriers to admission and departure from the industry; and, frequently (4) specialised knowledge about production methods that are not available to other potential producers.

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4 0
1 year ago
"i can do well in a challenging situation without being a credit to my race
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3 years ago
Read 2 more answers
Mullineaux Corporation has a target capital structure of 70 percent common stock, 15 percent preferred stock, and 15 percent deb
Jet001 [13]

Answer:

a.

The WACC is 9.4875%

b.

The after tax cost of debt is 3.25%

Explanation:

The WACC or Weighted average cost of capital is the cost to a firm of its capital structure based on the weighted average of costs of all the components that form up its capital structure. The components in a firm's capital structure are debt, preferred stock and common stock.

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

Where,

  • w represents the weight of each component in the overall capital structure
  • r represents the cost of each component
  • we multiply the cost of debt by (1 - tax rate) to take the after tax cost of debt

a.

WACC = 0.15 * 0.05 * (1-0.35)  +  0.15 * 0.04  +  0.7 * 0.12

WACC = 0.094875 or 9.4875%

b.

The after tax cost of debt is calculated by multiplying the cost of debt or rD by (1 - tax rate).

After tax cost of debt = 0.05 * (1 - 0.35)    =  0.0325 or 3.25%

5 0
3 years ago
On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $71,000
elena-14-01-66 [18.8K]

Answer:

b) $28,500.

Explanation:

The computation of the net  realizable value of receivables is shown below:

As we know that

Net realizable value = Gross account receivable - allowance for doubtful debts

where,

Gross account receivable is

= Beginning balance of the account receivable + credit sales - written off amount - collections

= $71,000 + $190,000 - $1,750 - $227,700

= $31,550

And, the allowance for doubtful debts is

= Beginning balance of  allowance for doubtful debts - written off + allowance needed

= $2,900 - $1,750 + $190,000 × 1%

= $3,050

So, the net realizable value is

= $31,550 - $3,050

= $28,500

hence, the correct option is b. $28,500

7 0
3 years ago
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