1. You decide to sell short 100 shares of the MDM Corp stock at the price of $55. Your margin deposit is 55%. Commission on sale is 1.5%. Throughout the year the stock pays a $2 for each share dividend. Interest upon margin debt is 5.0% for each year.
A) Compute your initial investment
B) At the end of one year you close out your short position by buying shares of MDM Corp at $40 for each share. Compute your dollar profit.