2. Stock transactions: Margin trading Suppose Megan wants to purchase 800 shares of Hydroflex stock at $60 per share through Kentucky Brokerage. The value of the shares is If Megan does not have enough funding to purchase the shares herself, and Kentucky Brokerage requires an initial margin of at least 50 percent Megan's initial equity Investment would need to be at least 5 In order for Kentucky Brokerage to lend her the funds. If Megan invests this amount, then Kentucky Brokerage would cover the remaining 5. If the price of Hydroflex's decreases to $50 per share, then the total value of Megan's shares is now S brokerage firms ], and as a result, her equity position is now s which represents of the stock As a result, Megan still owes the % of the market value If Kentucky Brokerage requires a maintenance margin of 30 percent, then Megan receive a margin call from Kentucky Brokerage If Kentucky Brokerage request 10 percent annual interest payment on the loaned funds, the shares pald out an annual divided of $2 per share, and Megan sold the shares at the end of the year when the price dropped to $50 per share, then what would her return on stocks purchased on margin be? -42 17 percent 36.67 percent 33.00 percent Chapter 12 Assignment o x -33.00 percent -29.34 percent If Megan was able to fund the entirety of the stock purchase herself and sold the shares at the end of the year when the price dropped to $50 per share, then what would be return on stocks purchased be? O-16:26 percent 0-1333 percent 0 -12.66 percent 11.60 percent True or Falser Based on your calculations, it can be concluded that purchasing stock on margin results in fewer losses in the price decreases True False