Question
Six months ago, you purchased 1600 shares of DEF stock on margin at $20/share.The initial and maintenance margins are 55% and 30%, respectively.Your broker charges
Six months ago, you purchased 1600 shares of DEF stock on margin at $20/share.The initial and maintenance margins are 55% and 30%, respectively.Your broker charges you a 4% annual interest rate on borrowed funds.You've received a $2 dividend per share over the course of your investment.DEF trades for $14/share today.Find your current margin.
Find your ROIC if you choose to close your margin position today
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International Financial Management
Authors: Cheol Eun, Bruce G. Resnick
8th edition
125971778X, 978-1259717789
