Question

You sold short 100 shares of Kraft Heinz Co. common stock on margin at $83.55 per share.
Assume the initial margin is 50% and the maintenance margin is 30%.
One year later, the stock price closes at $59.61, and it has paid cash dividends of $2.50 per share.
What is your return on equity?  Ignore margin interest.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Finance

Related Finance Q&A

Find answers to questions asked by students like you.

Q: NOTE: You already replied on this question with the answers as indicated below. Unfortunately, all a...

A: Part (a)All financials below are in $ mn.The net cash flow at time 0 if the old equipment is replace...

Q: Given the following informations annual sales in units                   30,000 cost of placing an o...

A: a.Calculation of EOQ:

Q: Decide whether the following statement makes sense​ (or is clearly​ true) or does not make sense​ (o...

A: The correct answer is “Statement A”.

Q: Here are the percentage returns on two stocks. Digital Executive Month Cheese Fruit January February...

A: Variance:Variance is a valuation of difference in each stock from the mean of stocks. It shows how a...

Q: Finding the Interest Rate: Concept Connection Example 6-3 (page 237) 18. What interest rates are imp...

A: Interest rate:An interest rate is a percentage on the principal amount at which a lender gives money...

Q: Todd Foley is applying for a $290,000 mortgage. He can get a $2,030 monthly payment for principal an...

A: Calculation of number of months:Excel spreadsheet for calculation of number of months 

Q: can I have this explained? After 20 years, 100 shares of stock originally purchased for $1000 was so...

A: The formula to calculate the yield on investment:Yield on investment can be determined using the CAG...

Q: Ed Draycutt is the engineering manager of Airway Technologies, a firm that makes computer systems fo...

A: You have asked a case sudy with four sub parts. I will answer the first three sub parts. Please post...

Q: 2. Bond valuation The proces value of the cash flows that the security will generate in the future s...

A: A bond’s coupon rate partially determines the interest-based return that a bond will pay and a bondh...