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Sara Sanders purchased 30 shares of Apple stock at $190.43 per share using the prevailing minimum initial margin requirement of 50%. She held the
Sara Sanders purchased 30 shares of Apple stock at $190.43 per share using the prevailing minimum initial margin requirement of 50%. She held the stock for exactly 7 months and sold it without any brokerage costs at the end of that period. During the 7-month holding period, the stock paid $1.38 per share in cash dividends. Sara was charged 5.3% annual interest on the margin loan. The i minimum maintenance margin was 25%. a. Calculate the initial value of the transaction, the debit balance, and the equity position on Sara's transaction. b. For each of the following share prices, calculate the actual margin percentage, and indicate whether Sara's margin account would have excess equity, would be restricted, or would be subject to a margin call: (1) $174.37. (2) $206.23, and (3) $122.56. c. Calculate the dollar amount of (1) dividends received and (2) interest paid on the margin loan during the 7-month holding period. d. Use each of the following sale prices at the end of the 7-month holding period to calculate Sara's annualized rate of return on the Apple stock transaction: (1) $184.12, (2) $194.56, and (3) $206.52 a. The initial value of the transaction is $ (Round to the nearest cent.) S
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