You purchase 1,000 shares of Wash (WSH) at $35 per share by giving your broker $20,000 to
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Question:
You purchase 1,000 shares of Wash (WSH) at $35 per share by giving your broker $20,000 to establish your margin account. After a year (t=1), PFE paid out a dividend of $2 per share. The rate on the margin loan is 8%. If you earn no interest on the funds in your margin account, what is PFE's price at which you will receive a margin call?
A. $51.07
B. $44.38
C. $26.83
D. $18.93
Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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