Hi everyone,
I have two questions on the below problem which is taken from an example in Schweser
shs purchased: 1000
purchase prise per shs: 100 usd
annual dividend per shs: 2usd
inital margin requirement: 40%
call money rate: 4%
commmission per share: 0.05usd
stock price after one year: 110usd
I am used to make these calulcations thanks to the CF function:
Cfo: -40’000 (inital margini) -50 (comission)
Cf1: -60’000-2400(call money interest that the client has to pay)+110’000 (stock value at the end)+2000(dividends)-50(comission)
note: that’s the solution presented in Schweser
What I don’t understand is why there is 2 times the - 50 USD. I thought that “one 50” at the beginning (in the Cfo) would be sufficient. When it’s presented like this, I have the impression that the clients pays the comission twice.
Thanks