Intro

The price of Walmart stock is currently $31.31 and you decide to buy 130 shares on margin. The inital margin is 60% and the broker's maintenance margin is 30%. The broker charges an effective interest rate of 7% on the margin loan.

Part 2

After the 7 months, the stock price has changed to $28.25 and the stock has paid dividends of $1.71 per share. What is the new percentage margin in the account?

Part 3

What is your effective annual return?