After researching Valero Energy common stock, Sandra Pearson is convinced the stock is overpriced. She contacts her account executive and arranges to sell short 700 shares of Valero Energy. At the time of the sale, a share of common stock had a value of $93. Three months later, Valero Energy is selling for $41 a share, and Sandra instructs her broker to cover her short transaction. Total commissions to buy and sell the stock were $115. What is her profit for this short transaction? Profit
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- After researching Best Buy common stock, Sally Wang is convinced the stock is overpriced. She contacts her account executive and arranges to sell short 200 shares of Best Buy. At the time of the sale, a share of common stock had a value of $140. Three months later, Best Buy is selling for $132 a share, and Sally Instructs her broker to cover her short transaction. Total commissions to buy and sell the stock were $54. What is her profit for this short transaction? Total profit after commissions?In March of this year, Ermine felt the market had nowhere to go but down. Accordingly, she sold short $15,000 of IGM stock. Her broker requires a 60% margin on short sales. Ermine covered her short position when the value of her shorted IGM shares fell to $13,000. During the time Ermine’s short position was open, IGM paid a dividend of $500. What percentage return did Ermine earn on her initial investment?Given that Local Care, Inc.'s stock is currently selling for $65 a share, calculate the amount of money that Elijah Pearson will make (or lose) on each of the following transactions. Assume that all transactions involve 100 shares of stock, and ignore brokerage commissions. Input all answers as positive values. He short-sells the stock and then repurchases the borrowed shares at $85.Total of $ . He buys the stock and then sells it some time later at $85.Total of $ . He short-sells the stock and then repurchases the borrowed shares at $50.Total of $ .
- On March 15, Marcos placed a good-'til-canceled order to buy 200 shares of ABC at $10 a share. ABC sold between $10.50 and $11.00 on that day. Over the following two months the stock price continued to rise and Marcos forgot about the order. After the markets closed on June 6, some bad news concerning ABC was released. The stock opened on June 7 at a price of $8.00 a share. Your friends and you are having a discussion about the status of Marcos’s order on June 7. The following views are expressed: 1. That the order was cancelled on May 15 because it had not been executed within the allowable two-month time period. 2. That the order was executed on March 15 at $10.50 a share since that was the best available price of the day. 3. That the order was executed on June 7 at a price of $10.00 a share. Resolve the matter by either choosing a correct view from the above .Lauren has a margin account and deposits $49,994 into it. Assume the prevailing margin requirement is 40%, interest and commisions are ignored, and the Gentry Wine Corporation is selling at $35 per share. a) How many shares can Lauren purchase using the maximum allowable margin? b) What is Lauren's profit (loss) if the price of Gentry's stock 1) rises to $45 and Lauren sells the stock? 2) falls to $25 and Lauren sells the stock? c) If the maintenance margin is 30% to what price can Gentry Wine fall before Lauren will receive a margin call?Suppose Formura’s stock is currently trading at $50 per share, but Lorenzo believes that the stock is overpriced. In response to this, he calls his broker to take a short position on 300 shares of Formura’s stock. Over the next three months, the price of Formura’s stock decreased, and Lorenzo placed an order to purchase 300 shares to offset his short position. If the price decreased to $45, then Lorenzo stands to earn $______ from his short position. -$3,000 $3,000 -$1,500 $1,500
- Rose Apothecary has just purchased 22% (22,000 shares) of Warner Farms, Inc. They paid $15.30/share of stock. 6 months later, Warner Farms issues a cash dividend of $0.18 per share. 4 months later, due to a series of questionable cheeses, Warner Farms is in financial trouble. Warner Farms records a $250,000 loss. Shortly after the loss posted, Rose Apothecary decides to sell their shares. They sell all 22,000 shares for $3 per share. Required: Record the journal entries for all of the above transactions from the perspective of Rose ApothecarySam bought through her broker 200 Apex Mining common stock at $61.50/share. The broker charged her 2% commission. One year later she sold the shares for $71.25. What is total cost of buying the stock?Shaylash bought 250 shares of stock at $31.38 per share. Several months later he sold the stock at $45.65 per share. His broker charges 4% commission for round lots and 5% for odd lots. Calculate the gain or loss on the transaction. (Show loss in parentheses)
- Accounting hassan has recently opened a margin account. He bought 200 shares of stock in the Abington Corporation at $80 per share by paying 70 percent initial margin for the stock, and shortly thereafter received a margin call from his broker. The broker explained that hassan's new account did not meet the maintenance margin requirements of 30 percent because the price of Abington stock fell right after hassan bought it. What percentage decline must Abington experience for hassan to violate the 30 percent maintenance margin requirement?Darlington Inc., permits any of its employees to buy shares directly from the company. There are no brokerage fees and shares can be purchased at a 10% discount. During May, employees purchased 14,000 shares at a time when the market price of the shares was $10 per share.Prepare the appropriate journal entry for the May purchase. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)After researching Valero Energy common stock, Sandra Pearson is convinced the stock is overpriced. She contacts her account executive and arranges to sell short 370 shares of Valero Energy. At the time of the sale, a share of common stock has a value of $39. Three months later, Valero Energy is selling for $29 a share, and Sandra instructs her broker to cover her short transaction. Total commission to buy and sell the stock were $82. What is her profit for this short transaction?