Jessica bought on margin 100 shares of Seniorita Bhd at the beginning of the year at $70 per share. The initial margin requirement is 50% and the annual interest on margin loans is 10%. Seniorita Bhd plans to capitalize all its profit for future business expansion. The maintenance margin is 25%.

i. Calculate the new margin (%) if the share price increases to $95 per share? (3 marks)

ii. How far would the share price have to drop before Jessica faces a margin call? (3 marks)

iii. What is Jessicas return on invested capital if at the end of the year she sells all the shares for $50 per share?