Can you please give me true answer this financial accounting question? You purchased 400 shares of Nova Grid Inc. common stock on margin at $50 per share.The initial margin requirement is 65%, and the stock pays no dividend.What would your rate of return be if you sell the stock later at $38 per share? (Ignoreany interest on margin.)

Step 1: Definition of Rate of ReturnThe rate of return (RoR) is a percentage that measures the…

Answered: You purchased 400 shares of Nova Grid…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You purchased 100 shares of common stock on margin for $30 per share. The initial margin is 50%, and the stock pays no dividend. Your rate of return would be __________ if you sell the stock at $40 per share. Ignore interest on margin.
You purchased 300 shares of common stock on margin for $60 per share. The initial margin is 60% and the stock pays no dividend. What would your rate of return be if you sell the stock at $45 per share? Ignore interest on margin.
You short sell 100 shares of a stock at $120. The broker charges a $1 fee per share shorted. The price increases to $135 and you decide to cover the short by buying back all the shares. What is your total loss from this transaction? (answer a positive integer, e.g., 1000 for a $1000 loss)
Give true answer of this question
Suppose you can buy 983 shares of Vertex Pharmaceuticals Incorporated (VRTX) stock on margin at $167 per share. Your initial margin is 51% and you borrow at the 7 percent. You sell your VRTX shares 6 months later for $185 per share. There were no dividends paid and the prices reflect commissions paid. What is your percent return if you buy on margin? [Enter the answer in as a percent (e.g., 5.55% = 5.55) - not a decimal]
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A speculator sells a stock short for $71 a share. The company pays a $2.50 annual cash dividend.After a year has passed, the seller covers the short position at $63. If the margin requirement is55 percent, what is the percentage return earned on the investment? Redo the calculations, assuming the price of the stock is $78 when the investor closes theposition. Based on your calculations to both scenarios, what generalization can be inferred?
You purchased 1000 shares of Company B's common stock on margin at $30 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Assume the stock pays no dividend; ignore interest on margin. Below what stock price level would you get a margin call?' "1
Ef 104.
(can you explain how did they solve this: (show full solution and formula) USE THE FOLLOWING INFORMATION FOR THE PROBLEM (1) You decide to sell short 200 shares of XCorp stock at a price of $75. Your margin deposit is 65 percent. Commission on the sale is 1.25%. While you are short, the stock pays a $1.75 per share dividend. Interest on margin debt is 5.25% per year. (1) Suppose at the end of one year XCorp is selling at $90 per share and you cover your short position at this price. What is your rate of return on the investment?(Assume a 1.25% commission on the purchase) -40.64% -25.53% 21% 7% –71.2% Ans: Rate of return = [75-90-0.9375-1.125-1.75- (1-.65)(75)(.0525)]/[(.65)(75)+0.9375] =-40.64% Option a
You’ve borrowed $22,000 on margin to buy shares in Ixnay, which is now selling at $32 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 30%. Two days later, the stock price falls to $22 per share. a. Will you receive a margin call? multiple choice No Yes b. How low can the price of Ixnay shares fall before you receive a margin call? (Round your answer to 2 decimal places.) Margin call will be made as price _______ or lower.

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You purchased 400 shares of Nova Grid Inc. common stock on margin at $50 per share. The initial margin requirement is 65%, and the stock pays no dividend. What would your rate of return be if you sell the stock later at $38 per share? (Ignore any interest on margin.)