Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. suppose that you sell short 250 shares of weston (

Suppose that you sell short 250 shares of Weston (WN), currently selling for $80 per...

50.1K

Verified Solution

Question

Accounting

image
Suppose that you sell short 250 shares of Weston (WN), currently selling for $80 per share, and give your broker $15,000 to establish your margin account. a. If you earn no interest on the funds on your margin account, what will be your rate of return after one year if WN stock is selling at $88; ( $80(II) $72? Assume that WN pays no dividends. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) (i) Rate of return (ii) Rate of return (iii) Rate of return b. If the minimum margin is 30%, how high can WN's price rise before Omit $ sign in your response.) rgin call? (Round your answer to 2 decimal places. Margin call will be made at price $0 or higher c. Redo parts (a) and (b), now assuming that WN's dividend (paid at year-end) is $2 per share a minus sign. Round your answers to 2 decimal places. Omit S sign in your response.) (Negative values should be indicated by (i) Rate of return (si) Rate of return (11) Rate of return

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Here is a dataset containing 11 GPAs of students at a university answers can be...

Statistics
Q

Using the Standard Normal Table. What is the probability a z-score is between -1.11 and 0.91? In...

Basic Math
Q

Use Figure 1 and Table 1 for the following: Compute the vertical effective stress (σ'v) in kN/m2...

Civil Engineering
Q

A) Body mass index (BMI) in children is approximately normally distributed with a mean of 24.5...

Basic Math
Q

An organization surveyed 1,100 adults and? asked, "Are you a total abstainer? from, or do you...

Basic Math
Q

Give five examples of organizational forms used to produce goods and services. What tax characteristics distinguish...

Accounting
Q

A bank account principal is $8,000 and accumulates yearly interest at 7% interest. Assuming that...

Basic Math
Q

Determine the t value in each of the cases Click the icon to view the...

Statistics
Q

For y = 6 cos(1/2)x(1) it's amplitude is __________(2) it's period is _________

Calculus
Q

Direct Materials and Direct Labor Variance Analysis Abbeville Company manufactures faucets in a...

Accounting
Q

QS 2-8 (Static) Analyzing transactions and preparing journal entries LO A1 For each transaction, (1)...

Accounting
Q

17 Downing Company issues $5,000,000, 5%, 5-year bonds dated January 1, 2017 on January 1,...

Accounting