ares in OKComputer currently trade at $45.33. Your broker allows you to short sell the shares with an initial margin of 60.00% and a maintenance margin of 40.00%. You short sell 100 shares, posting margin accordingly. The broker charges you no interest on the account. OKComputer pays no dividends. How high would the stock price have to rise in order for you to face a margin call?
ares in OKComputer currently trade at $45.33. Your broker allows you to short sell the shares with an initial margin of 60.00% and a maintenance margin of 40.00%. You short sell 100 shares, posting margin accordingly. The broker charges you no interest on the account. OKComputer pays no dividends. How high would the stock price have to rise in order for you to face a margin call?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter26: Mergers And Corporate Control
Section: Chapter Questions
Problem 7MC
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Shares in OKComputer currently trade at $45.33. Your broker allows you to short sell the shares with an initial margin of 60.00% and a maintenance margin of 40.00%. You short sell 100 shares, posting margin accordingly. The broker charges you no interest on the account. OKComputer pays no dividends. How high would the stock price have to rise in order for you to face a margin call?
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