Question
You purchased 100 shares of Apple common stock on margin at $100 per share. Assume the initial margin is 60% and the maintenance margin is
You purchased 100 shares of Apple common stock on margin at $100 per share. Assume the initial margin is 60% and the maintenance margin is 40%. (Assume the stock pays no dividends, and ignore interest on the margin loan.) (a) At what price will you get a margin call?
(b) What is your return when you get a margin call?
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Answer To determine the price at which you will receive a margin call we need to calculate the equity percentage in your margin account The equity percentage is the ratio of your equity the value of y...
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
12th edition
978-0324597714, 324597711, 324597703, 978-8131518571, 8131518574, 978-0324597707
