Alfonso purchased 700 shares of Crosswinds, Inc., stock on 60percent margin when the stock was...

Alfonso purchased 700 shares of Crosswinds, Inc., stock on 60 percent margin when the stock was selling for $38.5 a share. The stock is currently selling for $33.8 a share. What is his current equity position? Enter your answer to the nearest dollar. Do not include a $ sign or a comma in your answer.

Solutions

Expert Solution

total cost of shares = 700*38.5 = 26950

Amount of Margin to be deposited = 26950*60% = 16170

Current Equity Position = (Cuurent Price-Buying Price)*No of Share

=(33.8-38.5)*700

=(-3290)

that means he is facing the loss of $3,290

Balance in the margin Account = 16170-3290 = $12,880

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

You purchased 250 shares of common stock on margin for $45 per share. The initial margin...

You purchased 250 shares of common stock on margin for $45 per share. The initial margin is 60%, and the stock pays no dividend. Your rate of return would be ________ if you sell the stock at $48 per share. Ignore interest on margin. 0.132 0.238 0.111 0.208

You purchased 100 shares of common stock on margin for $150 per share. The initial margin...

You purchased 100 shares of common stock on margin for $150 per share. The initial margin requirement is 65%, the maintenance margin requirement is 40%. Find your rate of return in % if you sell the stock at $180 per share exactly 1 year later if interest rate on margin loan is 10%

You purchased 800 shares of stock for $49.20 a share. The initial margin requirement is 65...

You purchased 800 shares of stock for $49.20 a share. The initial margin requirement is 65 percent and the maintenance margin is 35 percent. What is the lowest the stock price can go before you receive a margin call? What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 100%? What is the lowest the stock price can go before you receive a margin call if both...

1.) Assume you purchased 100 shares of Zoomer Corp's stock on margin at the beginning of...

1.) Assume you purchased 100 shares of Zoomer Corp's stock on margin at the beginning of the year for $40 per share. You use $2500 of your own funds and borrow $1500 from the broker. Maintenance Margin requirement is 25%. a) At what price would you receive a margin call (ignore interest)? b) Annual interest cost is 4% on the margin account loan. What is your rate of return on your investment if Zoomer's stock is $44.50 per share after...

An investor purchased 200 shares of stock at $100 per share on 65% margin. Suppose the...

An investor purchased 200 shares of stock at $100 per share on 65% margin. Suppose the maintance margin is 40% at what price does the investor get a margin call? Regarding the previous question, if the price declines to $70 per share whats the return to the investors equity? What if the stock price rises to $150 per share? ignore interest and transaction costs.

On February 1, Rinehart Company purchased 700 shares (2% ownership) of Givens Company common stock for...

On February 1, Rinehart Company purchased 700 shares (2% ownership) of Givens Company common stock for $32 per share. On March 20, Rinehart Company sold 140 shares of Givens stock for $4,060. Rinehart received a dividend of $2.00 per share on April 25. On June 15, Rinehart sold 280 shares of Givens stock for $10,640. On July 28, Rinehart received a dividend of $3.00 per share. Prepare the journal entries to record the transactions described above. (Credit account titles are...

You buy 700 shares of SUV at $70.63/share on 35% margin. You must deposit to margin...

You buy 700 shares of SUV at $70.63/share on 35% margin. You must deposit to margin _________ Your leverage on this investment is _________

You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the...

You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin. Round your answer to the nearest cent (2 decimal places).

You purchased 1000 shares of Dell stock on margin at $70 per share. Assume the initial...

You purchased 1000 shares of Dell stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance margin is 40%. Assume the stock pays no dividends, and ignore interest on the margin loan. a.What is the rate of return on his investment if the price rises to $85 per share? b.What is the margin if Stock price falls to $60 per share, will the investor receive a margin call ? c.How far can the stock...

Alfonso Inc. acquired 100 percent of the voting shares of BelAire Company on January 1, 2020....

Alfonso Inc. acquired 100 percent of the voting shares of BelAire Company on January 1, 2020. In exchange, Alfonso paid $459,500 in cash and issued 100,000 shares of its own $1 par value common stock. On this date, Alfonso’s stock had a fair value of $15 per share. The combination is a statutory merger with BelAire subsequently dissolved as a legal corporation. BelAire’s assets and liabilities are assigned to a new reporting unit. The following shows fair values for the...

Subjects