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In 2018 you purchased 100 shares of Disney Co. on margin. The stock is currently trading at $80. Your initial margin requirement is 70 %
In 2018 you purchased 100 shares of Disney Co. on margin. The stock is currently trading at $80. Your initial margin requirement is 70 % with an interest rate on the margin loan of 8%. You do not earn interest on your funds in the margin account. You have a minimum maintenance requirement of 30%.
At what price will you get a margin call?
If Disney Co sold at $95 at the end of 2018, what is your rate of return?
What is your rate of return on Disney Co. if 100% of the investment were your funds?
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