Question
Assume you buy 100 shares of cruise corp at $40 on 70%. It rises to $55 in one year and you sell. Your borrowing costs
Assume you buy 100 shares of cruise corp at $40 on 70%. It rises to $55 in one year and you sell. Your borrowing costs are 12%.
- what is your annual rate of return?
- If your maintenance margin is 45%, how low can the stock drop before you get a margin call?
C)If the stock drops to $15, how much margin will you have to send in?
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
