Answer:
210 shares
Explanation:
A customer sells 200 shares of ABC stock in a margin account
ABC declares a 5% stock dividend
=5/100
= 0.05
Therefore, the amount of shares that must be purchased inorder to close out the short position can be calculated as follows
= 200×0.05
= 10
10+200 shares
= 210 shares
Hence 210 shares must be purchased to close out the short position
