Sold short 100 shares of Chevron common stock on margin

jagguarpaw January 23, 2017 0 Comments

Question: You sold short 100 shares of Chevron common stock …

You sold short 100 shares of Chevron common stock on margin at $83.44 per share. Assume the initial margin is 50% and the maintenance margin is 30%. One year later, the stock price closes at $95.75, and it has paid cash dividends of $4.29 per share. What is your return on equity? Ignore margin interest.