Question: Mr. Blight opened a margin account and bought 200 shares of stock in the XYZ Corporation at $80 per share. The initial margin was 70%.

Mr. Blight opened a margin account and bought 200 shares of stock in the XYZ Corporation at $80 per share. The initial margin was 70%. Shortly after this investment Mr. Blight received a margin call from his broker. The broker explained that Mr. Blight's new account did not meet the maintenance margin requirement of 30% because the price of XYZ stock fell right after Mr. Blight bought it. Compute the price of XYZ stock for which Mr. Blight's account violate the 30% margin requirement.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

No of shares 200 MPS of shar... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (2 attachments)

6366d9ac6e244_240934.pdf

180 KBs PDF File

6366d9ac6e244_240934.docx

120 KBs Word File

Students Have Also Explored These Related Banking Questions!

A suspender on a suspension bridge consists of a cable that passes over the main cable (see figure) and supports the bridge deck, which is far below. The suspender is held in position by a metal tie...

Not long ago, Jack Edwards bought 200 shares of Almost Anything Inc. at $45 per share; he bought the stock on margin of 60%. The stock is now trading at $60 per share, and the Federal Reserve has...

A Swedish investor bought 200 shares of IBM on January 1 on the New York Stock Exchange at $120. The exchange rate was SEK/USD = 7.00. Over the year, the investor has received a gross dividend of $5...

A stock is currently selling at 80 per share to yield 10% nominal convertible semi-annually. The stock is expected to pay dividends at the end of each year forever. The next dividend, payable one...

The Howland Carpet Company has grown rapidly during the past 5 years. Recently, its commercial bank urged the company to consider increasing its permanent financing. Its bank loan under a line of...

Using Financial Reports: Evaluating Financial Information as a Bank Loan Officer Stoscheck Moving Corporation has been in operation since January 1, 2012. It is now December 31, 2012, the end of the...

Magliochetti Moving Corporation has been in operation since January 1, 2010. It is now December 31, 2010, the end of the annual accounting period. The company has not done well financially during the...

Monroeville Moving Corporation has been in operation since January 1. 2003. It is now December 31. 2003, the end of the annual accounting period. The company has not done well financially during the...

Veronica's Bears Ltd. manufactures teddy bears. The shareholders' equity account balances at August 1, 2015, are shown below: $3.60 cumulative preferred shares (750,000 authorized, 75,000 issued and...

Events and Transactions} The accountant for Boatsman Products Inc. received the following information: a. Boatsman sent its customers a new price list. Prices were increased an average of $3 \%$ on...

Zoltar Moving Co. has been in operation for over 30 years providing moving services for local households and businesses. It is now December 31, 2024, the end of the annual accounting period. Assume...

Refer to Figure. Find the areas of the dead weight loss for the monopolist. Figure -MC-ATC D MR qeantity

Let W1 and W2 be subspaces of a nite dimensional vector space. Prove that dim(W1 W2) min{dim(W1), dim(W2)} and dim(W1 + W2) max{dim(W1), dim(W2)}.

c ) x 2 ( x 2 4 ) 3 2 d x

The direct labour budget of Small Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labour-hours: The companys variable manufacturing overhead rate is...

PTech Ltd. manufactures two models of cordless phones. The Family Friend model has features designed for a multiple-user family, including the ability to have multiple ringtones and caller ID. The...

Scalar Manufacturing produces automobile parts in batches in one continuous manufacturing process. The company uses direct labour hours to assign overhead to each part. Magda Malakova, the financial...

Leppard Enterprises had the following selected transactions. 1. Kim Leppard invested $5,000 cash in the business in exchange for common stock. 2. Paid office rent of $950. 3. Performed consulting...

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2011. The bonds mature in 2020 (10 years). For bonds of similar risk and maturity, the market...

The tetrazole moiety serves to mimic the acidic residue present in angiotensin II The drug is considered as a prodrug The imidazole ring is not an absolute requirement for receptor interaction Both a...

Mr Blight the owner of Blight Oil exploration firm is evaluating a new Oil well in Calgary Alberta. The oil exploration engineer has just finished his analysis of the new Oil well. He has estimated...

Mr Price: An African retail success story (Assignment 3) Serving fashion since 1985 In 1985, the retail giant, Mr Price, opened its doors in Durban, South Africa. At the time, the founders, Stewart...

Question 1: Investment in Shares (35 Marks) Mr Gan is planning to invest in the shares of NWP Holdings Bhd, Ta Win Holdings Bhd and Waja Konsortium Bhd. Particulars of his purchase are as follows a)...