Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The current market price for XYZ is $22 per share. Initial margin is 50%, maintenance margin is 35% and margin interest is 1.75% per year.XYZ

image text in transcribed

The current market price for XYZ is $22 per share. Initial margin is 50%, maintenance margin is 35% and margin interest is 1.75% per year.XYZ pays annual cash dividends of $0.95 per share.You believe the stock price will increase over the next year and wish to trade long using margin. At what price would you receive a margin call?Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jeff Madura, Hardeep Singh Gill

4th Canadian edition

134724712, 134724713, 9780134779782 , 978-0134724713

More Books

Students also viewed these Finance questions