Marlene Bellamy purchased 400 shares of Writeline Communications stock at $55.31 per share using the prevailing minimum initial margin requirement of 51%. She held the stock for exactly 5 months and sold it without any brokerage costs at the end of that period. During the 5-month holdingperiod, the stock paid $1.56 per share in cash dividends. Marlene was charged 8.3% annual interest on the margin loan. The minimum maintenance margin was 25%.

a. Calculate the initial value of thetransaction, the debit balance, and the equity position onMarlene's transaction.

b. For each of the following shareprices, calculate the actual marginpercentage, and indicate whetherMarlene's margin account would have excessequity, would berestricted, or would be subject to a margincall:

(1) $44.94, (2) $70.62, and(3) $34.63.

c. Calculate the dollar amount of(1) dividends received and(2) interest paid on the margin loan during the 5-month holding period.

d. Use each of the following sale prices at the end of the 5-month holding period to calculateMarlene's annualized rate of return on the Writeline Communications stocktransaction:

(1) $50.73, (2) $60.56, and(3) $70.93.