Which one of the following is used as an indicator that a firm has good-quality

Question

Which one of the following is used as an indicator that a firm has good-quality earnings? declining price-earnings ratios constant price-earnings ratios cash flow per share that exceeds earnings per share earnings per share that exceed cash flow per share positive earnings per share You short sold 1.000 shares of stock at a price of $53 and an initial margin of 60 percent. If the maintenance margin is 20 percent, at what share price will you receive a margin call? What is your account equity at this stock price?

Explanation / Answer

Q30 ( D)

1 stock price is 74.60

(initial margin 53*60%=31.80

maintainance margin 53*20% =10.60

so stock price is 53+(31.80-10.60))

and his equity account at this price 1000*10.6

10600

2 profit if price is 83.61

10(83.61-75-4.05)=45.6

if price is 69.56

loss of 4.05*10=40.5

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