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Suppose that you just purchased 250 shares of Beta Banana's stock for $70 per share. The initial margin requirement is 76.5%, which means the amount
Suppose that you just purchased 250 shares of Beta Banana's stock for $70 per share. The initial margin requirement is 76.5%, which means the amount borrowed is $4,112. The corresponding balance sheet is below: Assets Liabilities and Equity Stock $17,500.00 Loan from broker $4,112.50 $13,387.50 $17,500.00 Total assets 1754- Equity 17500.00 Total liabilities and equity a. Now suppose the price of the stock falls to $45 per share. What is your current margin percentage? (Round your answer to 2 decimal places.) Margin percentage % b. Construct the balance sheet to show the current situation. Assets Liabilities and Equity Stock Loan from broker Equity Total liabilities and equity Total assets c. If the maintenance margin is 50%, what is the highest stock price that will trigger a margin call? (Round your answer to 2 decimal places.) Price
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