Silver Ships is not as well prepared for the future as it could be in terms of succession planning‚ diversification and capital structuring. The attached report recommends that Mike McCarty take immediate action to establish a strong plan for the future of the company. The company is currently funded entirely by equity‚ and the appropriate use of debt to grow the company would provide for opportunities to expand and diversify. McCarty must rely on his vision and innovative skills to expand and
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Homework 2 Solution Key Problem 1. Suppose that you sell short 500 shares of Intel‚ currently selling for $40 per share‚ and you give your broker $15‚000 to establish your margin account. Assume Intel pays no dividends. a) If you earn no interest on the funds in your margin account‚ what will be your rate of return after one year if Intel stock is selling at (i) $44; (ii) $40; (iii) $36? The gain or loss on the short position is 500 P . Invested funds are $15‚000. Therefore‚ your rate
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Assignment 6 FIN321 Winter 2015 Using a Broker - Buying on Margin - Selling Short 1. Your friend Joe will begin saving for his retirement after he graduates in December. He is trying to decide whether he will employ the services of an investment company or build his own portfolio. Which do you think Joe ought to do? You know him as well as anybody! Explain to Joe why he ought to follow the path that you recommend. (Please talk directly to Joe!) Joe‚ you should invest your retirement savings
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sale with an initial margin requirement of 60 percent. The maintenance margin is 30 percent. The stock is currently trading at $27.50 a share. What is your current margin position in this stock? Assets = $21‚400 Equity = $21‚400 x .60 = $12‚840 Short position = 1‚000 x $27.50 = $27‚500 Account equity = $21‚400 + $12‚840 - $27‚500 = $6‚740 Margin position = $6‚740 / $27‚500 = 24.51 % 2. Matt short sold 500 shares of Tall Pines stock at $19 a share at an initial margin of 65 percent. The
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purchase Creative Computers (CC)? The initial margin is 50% for both long and short positions. Assume that the arbitrage opportunity disappears when Ubid shares are distributed to CC shareholders. Without considering margin interests on both long and short positions‚ what should be the minimum rate of return in six months? IV. Risks in arbitrage (1 mark) What are the risks associated with the arbitrage transactions? V. Margin call (3 marks) The maintenance margin is 25% for long and 30% for short
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REDEFINE THE BUYING MIX TO IMPROVE THE GROSS MARGIN OF BANGLES IN RELIANCE GEMS AND JEWELS LIMITED * Submitted by * Aswathy Nair MS * Objectives * To identify the average monthly sales of Bangles for the financial year 2010-2011. * To define ideal stock quantity on the basis of current stock quantity and stock cover. * To propose a buying mix on the basis of cost supplied by vendors. * To analyze the improvement of gross margin on the basis of revised buying mix.
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SYNOPSIS The case study is about Haute Couture Fashion Bhd (HCF) and how it ran into trouble in early 2009. HCF was established in the 1974 with first fully equipped factory in Penang then started out as a small unlisted family business in the clothing manufacturing business. HCF has very quick established as high quality manufacturer of both men’s and women’s clothes. The case relates‚ in particular‚ to the problems currently being faced by HCF. Its new Managing Director‚ Jeffrey Cheong had just
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ASSESSMENT COVER SHEET |Unit Number and Title |Unit 2: Managing Financial Resources and Decisions - Level 4 | |Assessment Title |Managing Financial Resources and Decisions | |Course Title |HND Business
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The word happiness can be defined as a mental or emotional state of well-being. Happiness is a feeling of satisfaction and pleasure. The topic of happiness is one that has been discussed over centuries by philosophers‚ clergymen and scientists inter alia. Their arguments have been based trying to properly define happiness taking into account what its causes are amongst other things. According to philosopher’s St. Augustine and Thomas Aquinas man’s last end is happiness. All men agree in desiring
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ACKNOWLEDGEMENT We would like to express our gratitude to all those who helped us during the whole of our project. We gratefully acknowledge the help of my supervisor‚ Mr. Fareedy who offered us invaluable advice throughout the project. He has spent time and energy to aid in the completion of this project and none of this would have been possible without his patient instructions‚ insightful criticisms and expert guidance. We would also acknowledge the enormous support and advice received from my
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