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slavikrds [6]
3 years ago
7

You’ve borrowed $21,518 on margin to buy shares in Ixnay, which is now selling at $40.6 per share. You invest 1,060 shares. Your

account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price changes to $38 per share. a. Will you receive a margin call?
Business
1 answer:
lbvjy [14]3 years ago
6 0

Answer:

a. No, you will NOT receive a margin call.

b. The price at which you will receive the margin call is $31.23 per share.

Explanation:

Note: This question is not complete as the part b of the requirement is omitted. To complete the question, the omitted part b is therefore provided before answering the question as follows:

b. At what price will you receive the margin call?

The explanation of the answer is now provided as follows:

a. Will you receive a margin call?

Margin loan = $21,518

Total amount invested = Number shares purchased * Selling price per share when purchased = 1,060 * $40.60 = $43,036

Initial equity = Total amount invested - Margin loan = $43,036 - $21,518 = $21,518

Market value of the stock two days later = Number shares purchased * Selling price per share two days later = 1,060 * $38 = $40,280

New equity = Market value of the stock two days later - Margin loan = $40,280 - $21,518 = $18,762

Percentage margin = New equity / Market value of the stock two days later = $18,762 / $40,280 = 0.4658, or 46.58%

Since your percentage margin of 46.58% is lower than the new required maintenance margin of 35%, you will NOT receive a margin call.

b. At what price will you receive the margin call?

Price to receive the margin call = (Margin loan / (100% - Maintenance margin after two days)) / Number of shares purchased = ($21,518 / (100% - 35%)) / 1,060 = $31.23

Therefore, the price at which you will receive the margin call is $31.23 per share.

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The optimal capital structure has been achieved when the: debt-equity ratio is equal to 1. debt-equity ratio results in the lowe
icang [17]

The optimal capital structure can be realized if : Debt-equity ratio selected results in the lowest possible weighted average cost of capital.

  • An optimal capital structure can be regarded as best mix of debt as well as equity financing which maximizes a company's market value.

  • And as well minimizing its cost of capital, it can be realized when Debt-equity ratio  that is been selected, gives the lowest possible weighted average cost of capital.

Learn more at:

brainly.com/question/10782180?referrer=searchResults

3 0
2 years ago
For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent. If, as a result
bearhunter [10]

Answer:

b. inelastic

c. Yes - it decreased

Explanation:

Elasticitiy of demand measures the responsiveness of quantity demanded to changes in price.

Elasticity of demand = percentage change in quantity demanded/ percentage change in price

= -2/4 = -0.5

The absolute value is 0.5

If the absolute value of the coffiecnet of elasticity of demand is less than one, demand is inelastic.

Demand is inelastic if a change in price has no effect on quantity demanded .

We can tell that the quantity demanded fell because of the negative sign in front of the percentage change in quantity demanded.

I hope my answer helps you

7 0
3 years ago
Hodgkiss mfg., inc., is currently operating at only 94 percent of fixed asset capacity. current sales are $740,000. how fast can
tangare [24]

Sales grow before any new fixed assets are needed is $156,480.

Fixed assets , additionally known as lengthy-lived assets or property, plant, and equipment, are a time period utilized in accounting for belongings and belongings that cannot without difficulty be converted into cash. fixed properties are one of a kind from modern assets, along with coins or bank accounts, due to the fact the latter is liquid belongings.

currently operating = 94 percent

current sales = $740,000

Full capacity sales = current sales/ Current capacity utilisation

                               = 500000/0.94

                               = $531,914.89

Percentage of fixed assets to full Capacity Sales = Fixed Assets / full Capacity Sales

                                                                                 = 400000/531914.89

                                                                                 = 0.752

Total Fixed assets Needed for New Sales = 74000*0.752

                                                                      = 556480

Additional Fixed Assets needed = 556480 - 400000

                                                      = $156,480   answer.

Learn more about fixed assets here:-brainly.com/question/25746199

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7 0
1 year ago
The contingency theory of leadership assumed that there are two kinds of leaders: ________ and ________ leaders. future-oriented
tresset_1 [31]
The contingency theory of leader assumed that there are two kinds of leaders: TASK ORIENTED AND RELATIONSHIP ORIENTED LEADERS. A task oriented leader is one who is most concerned about getting jobs done than with the feeling of and relationship among his team. A relationship oriented leader is one who is primarily concerned with the feelings of his team members and their relationships with one another.
6 0
2 years ago
An investor who has a margin account with his brokerage firm buys 100 shares of Quick Flip Inc. Later that day, the investor sel
Hoochie [10]

Answer:

Yes  this sequence of transaction is considered as a day trade.

Explanation:

As per the definition of the day trading, <em>Day trading is defined as the purchase and sale of a security within a single trading day. It can occur in any marketplace but is most common in the foreign exchange (forex) and stock markets.</em>

As per this definition, the trading has to be done such that the purchase and sale is made on the same day. As indicated in the question ,this is the case so the given sequence of transactions is a day trade.

6 0
3 years ago
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