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On January 1, you sold short one round lot (that is, 100 shares) of Snow's stock at $20.00 per share. On March 1, a dividend of $1.60 per share was paid. On April 1, you covered the short sale by buying the stock at a price of $15.20 per share. You paid 50 cents per share in commissions for each transaction. Required: a. What is the proceeds from the short sale (net of commission)? Proceeds from the short sale

On January 1, you sold short one round lot (that is, 100 shares) of Snow's stock at $20.00 per share. On March 1, a dividend of $1.60 per share was paid. On April 1, you covered the short sale by buying the stock at a price of $15.20 per share. You paid 50 cents per share in commissions for each transaction. Required: a. What is the proceeds from the short sale (net of commission)? Proceeds from the short sale

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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On January 1, you sold short one round lot (that is, 100 shares) of Snow's stock at $20.00 per share. On March 1, a dividend of $1.60 per share was paid. On April 1, you covered the short sale by buying the stock at a price of $15.20 per share. You paid 50 cents per share in commissions for each transaction. Required: a. What is the proceeds from the short sale (net of commission)? Proceeds from the short sale b. What is the dividend payment? Dividend payment c. What is the total cost, including commission, if you have to cover the short sale by buying the stock at a price of $15.20 per share? Total cost including commission d. What is the net gain from your transaction?
Transcribed Image Text:On January 1, you sold short one round lot (that is, 100 shares) of Snow's stock at $20.00 per share. On March 1, a dividend of $1.60 per share was paid. On April 1, you covered the short sale by buying the stock at a price of $15.20 per share. You paid 50 cents per share in commissions for each transaction. Required: a. What is the proceeds from the short sale (net of commission)? Proceeds from the short sale b. What is the dividend payment? Dividend payment c. What is the total cost, including commission, if you have to cover the short sale by buying the stock at a price of $15.20 per share? Total cost including commission d. What is the net gain from your transaction?
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