Question
Sara Sanders purchased 3030 shares of Apple stock at $189.71 per share using the prevailing minimum initial margin requirement of 59%. She held the stock
Sara Sanders purchased 3030 shares of Apple stock at $189.71 per share using the prevailing minimum initial margin requirement of 59%. She held the stock for exactly 77 months and sold it without any brokerage costs at the end of that period. During the 77-month holding period, the stock paid $1.46 per share in cash dividends. Sara was charged 5.7 % annual interest on the margin loan. The minimum maintenance margin was 25%.
c. Calculate the dollar amount of (1) dividends received and (2) interest paid on the margin loan during the 77-month holding period.
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