Question
Kathy Smith has a margin account with a balance of $60,000. Initial margin requirements are 60 percent and Tesla stock is currently selling for $400
Kathy Smith has a margin account with a balance of $60,000. Initial margin requirements are 60 percent and Tesla stock is currently selling for $400 per share.
Given this information, how many shares of Tesla can Kathy buy using full margin? If the stock price rises to $425 per share and Kathy closes out her margin position, what will be the rate of return on her investment? Show detailed steps of calculations.
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
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