Suppose you want to buy 10,000 shares of MegaWorld Corporation at a price of 4.00 You put up P10,000 and borrow the rest. What does your account balance sheet would look like? What is your margin? Assets Liabilities and Account Equity 10,000 shares of MegaWorld Corporation   ₱ 40,000 Margin Loan                             ₱ 30,000   Account Equity                         ₱ 10,000                    Total                                                   ₱ 40,000      Total                                     ₱ 40,000   Margin = ₱ 10,000 / ₱ 40,000 = 0.25 = 25% 2. Supposed that in the previous problem you shorted 10,000 shares instead of buying. The initial margin is 60 percent. What does the account balance sheet look like?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. Suppose you want to buy 10,000 shares of MegaWorld Corporation at a price of 4.00 You put up P10,000 and borrow the rest. What does your account balance sheet would look like? What is your margin?

Assets

Liabilities and Account Equity

10,000 shares of MegaWorld Corporation   ₱ 40,000

Margin Loan                             ₱ 30,000

 

Account Equity                         ₱ 10,000         

          Total                                                   ₱ 40,000

     Total                                     ₱ 40,000

 

Margin = ₱ 10,000 / ₱ 40,000

= 0.25

= 25%

2. Supposed that in the previous problem you shorted 10,000 shares instead of buying. The initial margin is 60 percent. What does the account balance sheet look like?

 

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